Legrand leaps as European shares gain ground

* FTSEurofirst 300 rises 0.3 pct

* Legrand (Other OTC: LGRVF - news) buoyed by broker upgrade

By Sudip Kar-Gupta

LONDON, Sept 2 (Reuters) - European shares rose on Tuesday, with French industrial group Legrand outperforming in response to a broker upgrade.

But European stock markets remained within a tight range as investors await the European Central Bank's (ECB) policy decision later this week.

While most market participants do not expect the ECB to take major easing steps this week, further measures are considered a matter of "when", not "if" in the face of risks to euro zone growth posed by low inflation as well as the Ukraine conflict, where Kiev forces are fighting pro-Russia separatists.

The pan-European FTSEurofirst 300 index, which has risen nearly 7 percent from its mid-August low, was up by 0.3 percent at 1,380.48 points, while the euro zone's Euro STOXX 50 index rose 0.6 percent to 3,194.16 points.

"Indexes have been moving sideways following the recent rally, a pattern which is usually followed by further gains. In the short term, European indexes should resume their rise towards June highs," Aurel BGC analyst Gerard Sagnier said.

European shares have rallied following dovish comments by ECB President Mario Draghi, which sparked market bets that the central bank is preparing to pump more liquidity into the system, possibly via purchases of government or corporate bonds, a measure known as quantitative easing (QE).

Sources from within the central bank told Reuters last week that new action at its meeting this Thursday was unlikely but not impossible, and that the barrier to QE was still "very high".

Terry Torrison, managing director at Monaco-based McLaren Securities, said many investors were holding off from taking new equity positions ahead of the ECB's meeting.

Torrison said there was a risk that stock markets could fall if the ECB was perceived to have not done enough on Thursday in terms of new measures to support Europe's flagging economy.

"It could be a case of 'buy the rumour, sell on the fact'. The market has had a good rally off the lows but it has got room to come back a little bit. Most people are waiting to see what Draghi says before committing new money to the market," he said.

Legrand rose 4.4 percent, making it the best-performing stock in percentage terms on the FTSEurofirst 300 index, after Bank of America Merrill Lynch raised its rating on the stock to "buy" from "neutral."

Industrial companies such as Legrand, which exports goods overseas, are expected to benefit from any new ECB action which could weaken the euro currency, as a weaker euro would help them sell their products abroad at more attractive prices.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (additional reporting by Blaise Robinson and Alexandre Boksenbaum-Granier. Editing by Jane Merriman)