* DAX hits new record highs, over 12,000 points
* Swiss market back near levels before SNB ended franc peg
* FTSEurofirst 300 up 0.7 pct
* Siemens rises on Egyptian power deals
* Special Catholic Holy Year lifts Autogrill and Atlantia
By Sudip Kar-Gupta
LONDON, March 16 (Reuters) - Germany's DAX raced to new record highs on Monday as European stocks extended their recent sharp rally as investors bet the weakened euro would boost the region's economy and lift exporter earnings.
The European rally also pushed up Switzerland's SMI equity index back near levels last seen in January, before a slump in that index caused by a surge in the franc after the Swiss National Bank (SNB) abandoned a three-year peg holding the value of its currency to 1.20 francs per euro.
The DAX -- which unlike many other European equity indexes factors in returns from dividends -- rose 1.6 percent to 12,088.68 points, smashing through the 12,000-point level for the first time.
The pan-European FTSEurofirst 300 index rose 0.7 percent to 1,589.57 points, its highest since late 2007.
The DAX and other European stock markets have been lifted by the European Central Bank's launch of a trillion euro money-printing scheme aimed at boosting economic growth in Europe.
The quantitative easing programme has weakened the euro and pushed bond yields to new historic lows, driving investors to seek the better returns available from the stock market.
Although the single currency recovered slightly on Monday, it has still lost about 25 percent of its value against the U.S. dollar since May last year.
"The unrelenting rally in European shares continues, helped by the weak euro and improving economic data. There is no reason right now to lighten up, and I continue to be a buyer," said Hampstead Capital hedge fund manager Lex Van Dam.
SIEMENS SURGES
Siemens was one of the top DAX performers, rising 2.1 percent to its highest level in around seven years after the German engineer won some Egyptian contracts.
Italian airport and highway caterer Autogrill and motorway operator Atlantia also hit record highs on expectations of higher passenger traffic after the announcement of a special Catholic church Holy Year.
Shares in Lafarge fell 4.6 percent and Holcim dipped 1 percent, however, as the two cement majors argued over the terms of their planned merger.
Irish construction rival CRH -- which has agreed to buy assets from Lafarge and Holcim as they try to win regulatory approval for their planned merger -- also fell 3 percent.
Many investors were looking towards the U.S. Federal Reserve's two-day meeting beginning on Tuesday.