Greek banking shares rally on expectation of debt deal

PARIS, Feb 3 (Reuters) - Greek stocks rose in early session trading on Tuesday, lifted by hopes for an agreement on the Greek debt standoff and by a further recovery in the shares of Greece's top banks.

Athens' new government dropped calls for a write-off of its foreign debt and proposed swapping debt for growth-linked bonds.

Finance Minister Yanis Varoufakis, in London to reassure private investors that he was not seeking a showdown with Brussels over a new debt agreement, said the new left-wing government would spare privately held bonds from losses, a source told Reuters.

The Athens Stock Exchange FTSE Banks Index, which hit a record low last week, rose 9.3 percent. National Bank (NYSE: NBHC - news) of Greece climbed 10 percent, Alpha Bank (Other OTC: ALBWF - news) was up 9 percent and Eurobank up 9.5 percent.

Athens' broader ATG benchmark equity index was up 4.6 percent. (Reporting by Blaise Robinson; Editing by Sudip Kar-Gupta)