European shares rally on reports of Greek debt plan

* FTSEurofirst 300 up 0.6 pct, Greece's ATG up 8 pct

* UBS (NYSEArca: FBGX - news) drops after warning on impact from Swiss franc

* Raiffeisen jumps after saying will cut exposure to Russia

By Blaise Robinson

PARIS, Feb 10 (Reuters) - European stocks rose on Tuesday, boosted by several press reports pointing to a possible debt agreement between Greece and its international creditors, with one report citing a six-month debt extension.

Athens's ATG index rose 8 percent, with National Bank (NYSE: NBHC - news) of Greece surging 21 percent, Eurobank up 20 percent and Bank of Piraeus rising 16 percent.

Despite the day's rally, Greek banking stocks are sill down 27 percent in 2015.

A report by MNSI, citing sources, said the European Commission would table a compromise proposal whereby Greece would ask for a six-month period during which it would discuss and agree with lenders all pending issues and a post-bailout plan.

"The market wants to believe there's a Greek deal right around the corner, but there's nothing concrete for the moment and it could take a long time before they reach an agreement. There's a risk of disappointment here," Meeschaert fund manager Frederic Rozier said.

"We're not selling equities at this point, but we're starting to look for exit points on a number of stocks that are reaching excessively high valuation levels."

At 1517 GMT, the FTSEurofirst 300 index was up 0.6 percent at 1,489.36 points, hovering below a recent seven-year high.

Raiffeisen Bank International (Other OTC: RAIFY - news) featured among the top gainers, up 7.3 percent after the Austrian lender said it would reduce its exposure to Russia and sell operations in Poland and Slovenia.

The stock had lost as much as 72 percent in the past 12 months, hurt by worries over its exposure to Russia. The Russian economy has suffered from falling oil prices and from Western sanctions over Moscow's support of separatists in eastern Ukraine.

UBS, Switzerland's biggest bank, bucked the trend. It dropped 3.4 percent -- the biggest loss among European blue chips -- after it warned against the effects of the surging Swiss franc and negative interest rates in Switzerland and the euro zone.

The bank said the Swiss central bank's move last month to abandon a cap on the value of the franc would hurt profits.

Swiss shares have been hit by the rise in the franc, with Switzerland's benchmark index SMI down 4 percent so far in 2015. The FTSEurofirst 300 index of top European shares, by contrast, has gained 8.8 percent over the same period.

French tyre maker Michelin (Paris: FR0000121261 - news) fell 2.8 percent after posting earnings that missed forecasts.

However, Europe's earning season has been mostly positive so far. About a third of the STOXX 600 index companies have reported results, and 63 percent have met or beaten analyst forecasts.

"I'm expecting to see forecast upgrades in Europe given the drop in the euro, the drop in commodity prices and the quantitative easing programme," said Bernard Aybran, head of multi-asset management at Invesco (NYSE: IVZ - news) , in Paris. "Profits in Europe are at such a low level that they can only go up from here."

"Dividends in Europe are also a big positive factor. The average yield in Europe for 2015 is 3.5 percent."

Security camera maker Axis AB surged 48 percent after Japan's Canon (Other OTC: CAJFF - news) said it plans to buy the Swedish company for about 23.6 billion Swedish crowns ($2.83 billion) to expand into surveillance products.

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

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

Today's European research round-up

(Additional reporting by Alexandre Boksenbaum-Granier; Editing by Andrew Heavens and Susan Fenton)