European shares rise, with retailer Metro and miners outperforming

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

* FTSEurofirst 300 up around 1 pct

* Yellen comments lift global equities

* Germany's Metro AG (Xetra: 725750 - news) surges on demerger plans

By Sudip Kar-Gupta

LONDON, March 30 (Reuters) - European shares rose on Wednesday as Federal Reserve Chair Janet Yellen called for caution on raising interest rates, boosting equities, while German retailer Metro (Other OTC: MTRAF - news) surged on demerger plans.

The pan-European FTSEurofirst 300 index advanced 1.2 percent. Germany's DAX gained 1.2 percent while the euro zone's blue-chip Euro STOXX 50 index rose 1.2 percent.

The FTSEurofirst still remains down 7 percent since the start of 2016, due to concerns about a China-led global economic slowdown.

Such risks were one reason as to why Yellen said on Tuesday that the U.S (Other OTC: UBGXF - news) . central bank should proceed only cautiously as it looks to raise interest rates.

Hampstead Capital hedge fund manager Lex Van Dam said Yellen's comments highlighted how measures from the Fed and European Central Bank (ECB) to try to keep rates low were hitting returns on bonds and cash, and pushing investors towards the better returns on offer from stocks.

"Equity markets remain supported by the global central banks - the economy might not be in great shape but with real rates in negative territory, there are not many other places to find a return," said Van Dam.

Yellen's comments weakened the U.S. dollar on currency markets, which in turn supported the shares of mining and energy companies since a weaker dollar makes commodities more affordable for investors holding other currencies.

Metro AG also jumped 7.5 percent after the company proposed to split itself in two, with its wholesale and food business transferred to a separate entity and the consumer electronics business remaining part of the existing company.

French transport group Alstom (LSE: 0J2R.L - news) also rose 4 percent as investors welcomed Alstom's new financial targets.

Today's European research round-up

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

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Mike Dolan, Markets Editor EMEA.

(Editing by Raissa Kasolowsky)