European stocks extend rally amid brisk investment inflows

* FTSEurofirst 300 up 0.2 pct, hovers below 7-1/2 yr high

* Europe equities enjoy $42 bln of inflows in past 10 weeks

* Germany's DAX up 23 percent so far in 2015

* Zodiac (Other OTC: ZODFF - news) sinks after profit warning

By Blaise Robinson

PARIS, March 20 (Reuters) - European stocks rose on Friday, with euro zone shares strongly outperforming again as global investors bet that a weaker euro would boost the region's economy and corporate earnings.

Athens' benchmark ATG jumped 2.8 percent after Greek Prime Minister Alexis Tsipras assured European Union creditors at late-night crisis talks in Brussels that his coalition would soon present a full set of economic reforms in order to unlock cash to stave off bankruptcy.

Bank of America (Swiss: BAC.SW - news) -Merrill Lynch said European equity funds had seen $5.4 billion investment inflows in the past week, bringing total inflows for the last 10 weeks to $42 billion, fuelled by expectations that the European Central Bank's asset-buying scheme would revive growth.

At 1120 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,600.26 points, with Germany's DAX gaining 1 percent and Spain's IBEX rising 0.8 percent.

The DAX, home of some of the euro zone's biggest exporters, has surged 22.6 percent since the start of the year, strongly outpacing Wall Street where the S&P 500 is up 1.5 percent over the same period.

The euro has fallen by about 25 percent against the dollar over the past year. This is set to give a major lift to European companies, as roughly 50 percent of euro zone earnings are coming from outside the region.

"Now (NYSE: DNOW - news) that investors are reassured about the pace at which the Fed will normalise its monetary policy, this year's positive trend on the market is set to continue. We will see further investment flows coming into Europe," Barclays France director Franklin Pichard said.

Shares (Berlin: DI6.BE - news) in Holcim (Other OTC: HCMLF - news) rose 1.3 percent and Lafarge (Paris: FR0000120537 - news) added 3.1 percent after the companies agreed new terms on a planned merger that would create the world's biggest cement firm. Shares in peer CRH (NYSE: CRH - news) , set to buy assets from Holcim and Lafarge, rose 5 percent.

Bucking the trend, France's Zodiac dropped 8.5 percent after the aerospace group issued a profit warning, citing a rise in costs.

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 Gareth Jones)