Germany outpaces flat European shares as trade data beat forecast

* STOXX Europe 600, FTSEurofirst 300 both flat

* Germany's Dax rebounds after strong trade data

* Portugal leads risers on growth optimism

By Francesco Canepa

LONDON, March 11 (Reuters) - German shares edged higher on Tuesday, outperforming mostly flat European stocks, as strong trade data from the region's largest economy revived investor appetite for the Dax index.

Broader market sentiment, however, was still undermined by a crisis in Ukraine, where confrontation between Kiev and Moscow showed no sign of easing.

Frankfurt's Dax blue-chip index, up 0.3 percent, bucked the trend after Germany reported seasonally adjusted exports and imports both rose more than forecast in January. The bounce was led by stocks exposed to the European economy, such as car maker VW and consumer-goods maker Henkel (Berlin: HEN.BE - news) .

The Dax had fallen 2.9 percent in the previous two sessions, dragged down by worries about Ukraine and by disappointing Chinese trade data.

"The German trade figures were very solid and do point to a continuing recovery combined with an acceleration in growth in 2014," said Markus Huber, a senior sales trader at Peregrine & Black. "Much will depend (on) how long the crisis in the Ukraine will drag on and if harmful sanctions and counter-sanctions will be put in place."

Russia's moves to take over Crimea have led to plans for a referendum on March 16 on whether to secede from Ukraine and join Russia. Those plans have provoked condemnation from western countries and the threat of international sanctions against Russia.

The STOXX Europe 600 index of the region's top shares was flat at 331.30 points at 1157 GMT, keeping just above support at 330 points, corresponding to last week's low.

The STOXX was still facing resistance at 339 points, a six-year high set earlier this month, with buyers reluctant to push the index to fresh highs amid threats of a war in Europe.

"If I were talking to a trader, I'd say, 'Buy now and sell at (Monday's high of) 334 and a half, even though it's a really small gain'", said Valerie Gastaldy, the head of Paris-based technical trading firm, Day-By-Day. "This is a sideways market and I'd do as little trading as possible, because both upside and downside are limited."

Gastaldy said the STOXX may fall as low as 320 points in the next few weeks and was waiting for the S&P 500, which had hit an all-time high on Friday, to resume its uptrend before buying back into European shares.

The narrower FTSEurofirst 300 was also flat at 1,320.37 points.

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PORTUGAL LEADS RISERS

Among smaller bourses, Portugal's PSI index was the best performer, up 0.7 percent, led by lender Banco Comercial Portugues, on optimism about the debt-laden country's growth prospects.

Portugal's gross domestic product grew a revised 0.6 percent in the fourth quarter, accelerating from the previous quarter as consumer demand rebounded and exports rose, data showed on Tuesday.

The release strengthened investor optimism that economies in southern Europe were starting to recover, as strong Italian data on Monday suggested.

The PSI has surged around 16 percent this year, leading a rally in southern European indexes. Italy's FTSE MIB has risen nearly 10 percent and Spain's Ibex roughly 3 percent.

While euro zone shares are now up 10 percent from their levels of three years ago, just before the euro zone debt crisis reached its peak, Portuguese stocks are still down 20 percent.

The MSCI Portugal index trades at a small discount to its euro zone peers, compared with a premium of up to 60 percent in 2009, Datastream data showed.

"Portugal has been recovering, and to some extent it has regained the confidence of financial markets," said Wouter Sturkenboom, strategist at Russell Investments, who has a positive stance on peripheral European indexes

"At the same time, the problems Portugal is facing are still very real: it has extremely high debt levels and it's going to be extremely hard to deal with that debt without external support, so that's holding us back a little."