Portugal outpaces flat European equity markets on bank boost

* FTSEurofirst 300 dips 0.1 pct

* Portugal's PSI rises 1.7 pct, boosted by BCP, BES

* Hugo Boss (Other OTC: BOSSY - news) falls after share placement

* Ahold (Amsterdam: AH.AS - news) down after below-forecast profit

By Francesco Canepa

LONDON, May 28 (Reuters) - Portuguese shares outperformed mostly flat European equities on Wednesday, bolstered by reassuring signs from the country's largest listed banks.

Most other major European indexes hovered close to multi-year highs, with falls in fashion brand Hugo Boss and consumer group Ahold keeping the pan-European FTSEurofirst 300 in check.

Lisbon's PSI 20 index, however, rose 1.7 percent, with the country's No 2. bank Millennium bcp up 3.5 percent after announcing it had repaid state loans held in contingent convertible bonds (CoCos).

The move, which had to be approved by the Portuguese central bank, was interpreted as a sign of confidence on the bank's health ahead of the European Central Bank's asset quality review (AQR).

"It shows BCP is in a comfortable situation," Andre Rodrigues, an analyst at Caixa Banco de Investimento, said.

"It means that the central bank of Portugal considers that BCP has enough capital, not only to replay those 400 million euros of CoCos but also to pass the AQR test."

Rodrigues also welcomed a successful placing of subscription rights in Portugal's largest bank, BES, as part of a 1.045 billion euro capital increase. Shares in BES jumped 5.1 percent.

The broader FTSEurofirst 300 index of top European shares was off 0.1 percent at 1,377.67 points by 1026 GMT, after hitting its highest level in more than six years on Tuesday.

The index has been supported by an improvement in economic data from the United States and expectations for more policy easing by the European Central Bank (ECB).

Dutch supermarket chain Ahold slipped 3.3 percent to the bottom of the FTSEurofirst after reporting lower margins in the United States and the Netherlands, its main markets.

"The market has some potential to rise further in the summer after recent gains, but equities are clearly not that cheap anymore," Gerhard Schwarz, head of equity strategy at Baader Bank in Munich, said.

"We might face some headwinds going forward as earnings expectations for the second half are too ambitious and could be revised down and economic growth might moderate next year."

Shares in fashion group Hugo Boss fell 2 percent to 103.70 euros after a source familiar with the transaction said private equity group Permira had placed a 5.6 percent stake in the fashion group with institutional investors at 101.50 euros apiece.

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 Atul Prakash; Editing by Susan Fenton)