(Reuters) - A rally in China's stock markets to seven-year highs on Monday kept an index of Asian shares near its highest level since September, as weak Chinese trade data intensified expectations for more economic stimulus measures from Beijing. Bulls are expected to prevail in early European trading as well, with financial spreadbetters predicting Britain's FTSE 100 .FTSE would open 2 to 3 points higher, or up 0.04 percent; Germany's DAX .GDAXI to open 19 to 20 points higher, or 0.16 percent up; and France's CAC 40 .FCHI to open 5 points higher, or 0.1 percent higher. "Stock markets have shown us time and again that you don't need a strong economy to have rampant gains. In fact, an economy that is showing fragility has tended to outperform, notably when the central bank is pushing a more accommodative stance," Chris Weston, chief market strategist at IG, wrote in a note. The Chinese markets' bull run has been fueled by speculative buying on hopes of fresh steps to boost an economy struggling for momentum, with first quarter gross domestic product data due to be released on Wednesday expected to show 7.0 percent growth. "More stimulus measures are needed in the future," said Nie Wen, a strategist at Hwabao Trust in Shanghai. In March, exports contracted 15 percent from a year earlier. The surprise drop left China with a trade surplus of $3.1 billion last month, much smaller than forecasts for one of $45.4 billion. "Exports were weak in the Q1, and they won't pick up soon given uncertainties from the U.S., Europe and emerging countries," said Yao Xuekang, an analyst at Essence Securities in Beijing. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS erased early losses and was up about 0.4 percent. That moved it back toward its highest levels since September, touched in the previous week. Hong Kong's benchmark Hang Seng Index .HSI was up 1.2 percent, on track for its eight consecutive rise on money inflows from mainland China investors who are seeking cheaper shares. The Shanghai Composite Index .SSEC was up 1.7 percent, while bargain hunters also pushed Shanghai's dollar-denominated B share index .SSEB up more than 9 percent for the second trading day. Japan's Nikkei stock average .N225 ended nearly flat, giving up a few ticks and never rising above the 20,000 level, which was broken on Friday for the first time in 15 years. Wall Street marked solid gains for both the day and the week on Friday, while the pan-European FTSEurofirst 300 share index .FTEU3 reached a 15-year high and Germany's DAX .GDAXI rose to a record. A renewed drop in the euro powered the European gains, with the single currency slumping to a 3-1/2 week low of $1.0567 on Friday. On Monday, it slipped about 0.2 percent on the day to $1.0587 EUR=. "We think the euro will fall below parity against the dollar by the end of the year because of the ECB's easing and low returns on capital in the euro zone," said Shin Kadota, chief FX strategist at Barclays in Tokyo. Against its Japanese counterpart, the dollar added 0.1 percent to 120.40 yen JPY=, with expectations of higher U.S. interest rates while Japan's stay low bolstering the greenback in the long term. The dollar index .DXY stood at 99.553, up about 0.2 percent on the day, and moving back toward its 12-year peak of 100.390 set last month. Crude oil prices extended last week's gains made after an agreement on Iran's nuclear program seemed more elusive, lessening the chances of a rapid return of Iranian oil to the market. Brent LCOc1 was up about 0.1 percent at $57.92 a barrel, after adding 5.3 percent for the week. U.S. crude CLc1 rose about 0.3 percent to $51.78 after an increase of 5.0 percent last week, its fourth consecutive weekly rise. World powers and Iran announced the interim accord last week, but on Thursday, Iranian leaders said all sanctions on the country must be lifted on the same day as any final agreement. Spot gold XAU= fell about 0.2 percent on the day to $1,204.20 an ounce, after snapping a three-week winning streak on a stronger dollar.

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