* Stocks eke out gains in Asia, Europe
* Oil falls as rig count gains highlights supply glut
* Sterling fall as minister resignation raises split
concerns
* Dollar picks up after falling last week on dovish Fed
By Nigel Stephenson
LONDON, March 21 (Reuters) - Shares edged up in Europe and
Asia on Monday, shrugging off a retreat in oil on concerns over
excess supply, as gains in Chinese shares and a benign U.S.
interest rate outlook brightened the mood.
The dollar edged up after falling for three successive
weeks, most recently after U.S. Federal Reserve policymakers
revised down the number of times they expect to raise interest
rates this year to two from four.
Sterling was a notable faller in the currency market.
Traders cited concerns over splits in the ruling Conservative
Party over last week's budget and a referendum on Britain's
European Union membership, after a pro-"Brexit" minister quit on
Friday over spending cuts.
The pan-European FTSEurofirst 300 stocks index .FTEU3
reversed early losses in basic resources companies .SXPP to
trade up 0.2 percent at the start of a week shortened by the
Easter break and, on Monday, a holiday in Japan.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.1 percent after entering positive
territory for the first time this year on Friday. However,
shares in Australia .AXJO and South Korea fell.
Chinese stocks rose. The CSI 300 index .CSI300 of the
largest listed companies in Shanghai and Shenzhen closed up 2.4
percent while the Shanghai Composite .SSEC gained 2.2 percent.
China's state margin lender, the China Securities Finance
Corp, said it would resume some short-term lending after
suspending parts of its business 18 months ago. It also cut
brokerages' borrowing costs.
"It's a clear signal that regulators are ready to provide
the market with easier, and cheaper funding," said Wang Yu,
analyst at Pacific Securities.
Top Chinese officials said on Sunday the economy was showing
signs of improvement while capital outflows from the county were
moderating.
Gyrations in the oil price, which are up some 50 percent
from lows around $27 a barrel hit earlier this year, have been
big drivers of financial markets in recent months, along with
slowing growth in China and the outlook for U.S. interest rates.
Brent crude LCOc1 , the international benchmark, last
traded at $40.78 a barrel, down 42 cents as the number of active
U.S. rigs rose, potentially deepening the global glut of oil
that has pulled prices down from $100 since mid-2014.
DOLLAR INDEX
The dollar index .DXY , which measures the greenback
against a basket of currencies, rose 0.2 percent
The euro < EUR=> fell 0.2 percent to $1.1245 while the yen
JPY= gained 0.2 percent to 111.39 per dollar.
Sterling GBP= fell 0.5 percent to $1.4401, pummeled after
the resignation of eurosceptic Work and Pensions Secretary Iain
Duncan Smith heightened worries over divisions in Prime Minister
David Cameron's government before the June 23 referendum.
"Sterling does not normally react strongly to UK politics so
this is probably due to Brexit," said Richard Benson, head of
portfolio investment at currency managers Millennium Global in
London. "The referendum is just making people focus on issues
like this a lot more."
Yields on low-risk German government bonds fell. Ten-year
yields were last down 3.5 basis points at 0.19 percent.
Gold XAU= last traded at $1,245.50 an ounce.