GLOBAL MARKETS-Greek plans buoy European shares, euro zone debt

(Updates prices, adds quotes)

* European shares rise after Greece drops debt write-down call

* Wall Street set for higher open

* Greece leads euro zone bond yields down, Bunds go below JGBs

* Australian dollar skids after surprise rate cut

By Nigel Stephenson

LONDON, Feb 3 (Reuters) - European shares rallied and yields on euro zone government bonds tumbled on Tuesday after the new Greek government dropped calls for a write-down on its foreign debt.

The euro also nudged higher but was overshadowed in currency markets by the Aussie dollar, which skidded after Australia unexpectedly cut interest rates.

In Athens, shares rose 9 percent, with the Greek banking index up 17 percent. Spanish and Italian stocks also outperformed as the pan-European FTSEurofirst 300 index gained more than 1 percent to just below a seven-year high.

Wall Street looked set to open higher, according to stock index futures.

The new Greek government, led by the left-wing Syriza party that won elections just over a week ago, on Monday ditched calls for a reduction of foreign debt and proposed ending a standoff with its official creditors by swapping the debt for new growth-linked bonds.

Finance Minister Yanis Varoufakis said after meeting investors in London on Monday that the government would spare privately held bonds from losses.

"The market is currently hoping that Greek negotiations of bailout terms will run quite smoothly. There are some signs that there might be a compromise in the making and there will not be any kind of default," Gerhard Schwarz, head of equity strategy at Baader Bank (Xetra: 508810 - news) in Munich, said.

Earlier, Asian shares sagged on growth concerns. MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares, excluding Japan , dipped 0.2 percent after weak U.S. data added to concerns about the state of the global economy. Japan's Nikkei closed down 1.3 percent.

In a brighter Europe, Greek bond yields fell sharply, with 10-year yields down nearly 115 basis points at 10.26 percent and on track for their biggest daily fall since December 2012.

Yields on other lower-rated euro zone government bonds also fell but so did those on German bonds, the bloc's benchmark. German 10-year yields dipped below those of Japan for the first time.

Investors said Greece's plans, unveiled on Monday as Varoufakis toured European capitals in a diplomatic offensive to garner support as the government seeks to replace the country's EU/IMF bailout deal, appeared to offer the chance of compromise.

"The level of noise is actually coming down a bit and a bit more compromise (is) being shown on both sides," said Michael Krautzberger, head of European fixed income at BlackRock (NYSE: BLK - news) .

The Aussie dollar was the big mover in currency markets, tumbling to a near six-year low against the U.S. dollar after the Reserve Bank of Australia cut interest rates. The Aussie was last down 1.7 percent at $0.7666.

"It's a big move and I think any bounce should be sold into," said Graham Davidson, a spot trader with National Australia Bank in London.

The Norwegian crown hit a two-month high of 8.62 to the euro as oil prices rose.

Crude prices added to gains of more than 11 percent in the previous two sessions, after BP announced a 13 percent reduction in capital expenditure for 2015, adding to cuts in investment in the sector

"We've seen a lot of oil companies announce significant cuts in capacity expenditure and reductions in rig counts. What you're getting at the moment is a paring back of expectations as a result of the measures being taken," said Michael Hewson, chief market analyst at CMC Markets.

Oil prices had jumped in the past two days after data showed the number of U.S. oil drilling rigs had fallen the most in a week in nearly 30 years.

Brent crude futures were last up 2.7 percent at $56.21 a barrel. (Additional reporting by John Geddie, Patrick Graham and Himanshu Ojha in London and Blaise Robinson in Paris; Editing by Susan Fenton)