European shares drop as Athens bourse slides

(Updates with closing prices)

* Athens' ATG index falls 3.9 pct on Greek debt worries

* FTSEurofirst 300 falls 1.6 pct to 1,555.46 points

* U.S. trade deficit grows

* UBS (NYSEArca: FBGX - news) rises after quarterly profit almost doubles

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

By Sudip Kar-Gupta

LONDON, May 5 (Reuters) - European shares fell on Tuesday as renewed concerns over Greece's finances weighed on the region's stock markets.

Athens' benchmark ATG equity index fell 3.9 percent on worries over a deadlock in Greece's attempts to strike a deal with its international creditors.

Greece stepped up diplomatic efforts with its euro zone partners on Tuesday to avoid running out of money this month, when it must make a big debt repayment to the International Monetary Fund (IMF) as cash reserves dry up.

Talks continued with the IMF, European Commission and European Central Bank on a cash-for-reform deal, but serious differences remained over pensions, labour reform and the minimum wage.

"Greece is not going to get sorted out any time soon. At the moment, I'm more bearish than bullish and I would sell on any stock market rally," said Terry Torrison, managing director at Monaco-based McLaren Securities.

Stock markets also came under pressure after the U.S. trade deficit grew in March to its widest in nearly 6-1/2 years, suggesting the economy contracted in the first quarter.

The pan-European FTSEurofirst 300 index, which reached its highest level in more than 14 years last month, closed down 1.6 percent at 1,555.46 points.

Germany's DAX, which also hit record highs last month, fell 2.5 percent while France's CAC dropped 2.1 percent.

MAPFRE FALLS, UBS RISES

Spanish insurer Mapfre (Xetra: CMAB.DE - news) fell 6.5 percent, the worst performer on the FTSEurofirst, after reporting a drop in first-quarter profit.

UBS rose 3.8 percent after the Swiss bank posted its highest quarterly profit in nearly five years.

Many traders said economic stimulus measures by the European Central Bank (ECB) were limiting damage to European stock markets from uncertainty over Greece. Record (LSE: REC.L - news) -low interest rates, coupled with ECB plans to buy government bonds, have pushed investors to the better returns available from stocks.

The FTSEurofirst 300 index remains up by around 14 percent since the start of 2015. The DAX is up 16 percent.

"The Greeks are not playing ball particularly well, but there's still a feeling among investors that they will somehow muddle through and arrive at another deal," said Hantec Markets analyst Richard Perry.

($1 = 0.9018 euros)

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

Today's European research round-up (Editing by Larry King and Pravin Char)