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LONDON, Mar 2 (Reuters) The euro firmed, Bunds fell and European shares were mixed on Thursday after the European Central Bank opened the door to further interest rate rises after a well-flagged and expected rate hike.

The ECB raised rates by a quarter point to a three-year high of 2.5 per cent after an initial rise to 2.25 per cent in December -- its first hike in five years.

ECB President Jean-Claude Trichet said the hike reflected the upside price risks and that the conditions remained in place for a continuing economic expansion in the region.

Trichet said ECB staff had upped their forecasts for euro zone GDP growth this year to 1.7-2.5 per cent and also revised up inflation forecasts, citing higher oil prices.

''He's left open the possibility of more rate hikes going forward...We've got the changes to the forecasts which have been slight upward revisions to HICP and also on the growth side. He's also talking tough on the monetary side,'' said David Keeble, head of fixed income strategy at Calyon.

The euro rose to as high as $1.1964. The currency has been stuck in a $1.18-$1.23 range since December.

Yields on 2-year euro zone bonds rose after Trichet's comments and were near levels not seen since December 2002, at around 3.04 per cent.

Earlier, the head of the world's largest luxury goods company LVMH warned the ECB against tightening credit too quickly.

''What worries me ... (is) that they will penalise European growth through hasty increases in interest rates without any justification,'' said LVMH's Bernard Arnault.

Shares in LVMH, along with Aviva and Deutsche Telekom, were among Europe's top blue-chip winners after earnings from all three went down well with investors.

SHARES FATIGUE But having reached a 4-1/2 year peak last month some traders said the European equity market was showing signs of fatigue.

''In the last few weeks we've had pretty good corporate earnings out but the market seems to be stuck in a range at the moment,'' said Oliver Stevens, senior equity trader at IG Index.

The FTSEurofirst300 index of leading European shares slipped 0.2 per cent to 1,352.7 points, having bounced in the previous session after the benchmark on Tuesday posted its biggest one-day fall since October.

Britain's FTSE 100 index held above water, helped mainly by firmer oil and mining stocks like BP and Rio Tinto as U.S. crude prices rose to $62.50 a barrel and as strikes spread across Mexico's mining industry, underpinning base metal prices.

U.S. stock index futures indicated a slightly weaker opening on Wall Street after U.S. shares rallied on Wednesday.

REUTERS SD DB2022