European shares rise for second day as ECB stimulus talk grows

(Adds closing prices, details)

* Pan-European FTSEurofirst 300 index up 2.6 pct

* Randstad top gainer after update, Syngenta (LSE: 0QOP.L - news) spikes

* Defence stocks rally on Syria strikes

* Greek shares surge after deal with its lenders

By Atul Prakash and Danilo Masoni

LONDON/MILAN, Nov 17 (Reuters) - European shares rose sharply on Tuesday, helped by encouraging updates from companies such as Germany's United Internet (Other OTC: UDIRF - news) and Dutch-based Randstad, the world's second-biggest staffing company.

Sentiment was also bolstered by expectations of more stimulus from the European Central Bank and by Greece's preliminary deal with its international lenders on home foreclosures.

Randstad shares jumped 6.9 percent, the top gainer in the pan-European FTSEurofirst 300 index, after the company said sales had accelerated since it reported third-quarter results and that it expected higher margins in 2016.

United Internet, which provides Internet services, rose as much as 4.5 percent after reporting a rise in third-quarter core profit and revenues as the number of subscribers continued to rise. The stock ended up 2.2 percent.

The FTSEurofirst 300 index climbed 2.6 percent, rising for a second day. French shares rose 2.8 percent, after falling 0.1 percent on Monday following the attacks in Paris on Friday, which killed at least 129 people.

Syngenta, the world's largest agrichemicals company, staged a late spike to end up 3.3 percent after reports on CNBC that Monsanto (Hamburg: 1132157.HM - news) was discussing another approach for the firm.

Lorne Baring, managing director of B Capital Wealth Management, said despite mounting worries over security in Europe investors were showing resilience to the Paris attacks, expressing confidence in prospects for European shares.

"Overall there is a macro tailwind for European equities. The monetary policy of the ECB will continue to weaken the euro versus other major currencies. We are continuing to recommend an overweight in European equities."

Expectations of further ECB stimulus grew on Tuesday after ECB's chief economist and executive board member Peter Praet told Bloomberg that an environment of weak price pressures in the medium term remained and the governing council would discuss whether there is a case for further action in the context of heightened uncertainty.

"Praet's latest comments reinforce the view that the central bank is soon going to provide some further stimulus measures to boost the region's economy. Sentiment is further improved by a weaker euro, which is going to help European exporters," said Koen De Leus, senior economist at KBC in Brussels.

"Greece's preliminary deal with its international lenders on home foreclosures reform is also good news for the market. It ensures no unsettling news for the financial markets from the Greek side in the short term."

Greece's ATG share index surged 2.2 percent after Athens reached a deal with its lenders, easing an impasse in its bailout programme to unlock fresh loans. Volatile Greek banks however turned lower.

European stocks dealing in the defence and military sectors also rose, as France launched new strikes on targets in Syria. Top gainers in the sector included Rolls Royce (LSE: RR.L - news) , Airbus , Zodiac Aerospace (Paris: FR0000125684 - news) and Thales (Paris: FR0000121329 - news) , which all rose more than 3.5 percent.

Shares (Berlin: DI6.BE - news) in easyJet, however, fell 4 percent, adding to a 0.4 percent drop on Monday, despite the company saying it was confident of future growth.

The airline said on Tuesday it would order 36 additional Airbus A320 aircraft after reporting an 18 percent jump in annual profit helped by strong demand for summer holiday travel. Some traders, however, said the absence of a special dividend was a disappointment.

"From a broader perspective, airport taxes and higher costs remain a threat, whilst the shocking events of the weekend are a stark reminder of the exogenous factors with which the airline industry has to deal," Hargreaves Lansdown (LSE: HL.L - news) analyst Richard Hunter said.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up (Editing by Dominic Evans and Susan Fenton)