UBS boosts European shares but Greek shares fall on debt concerns

* FTSEurofirst 300 up 0.6 pct, lifted by surge in UBS (NYSEArca: FBGX - news)

* Athens' ATG index down 3 pct as debt worries weigh

* Asset performance in 2015: http://link.reuters.com/gap87v

By Sudip Kar-Gupta

LONDON, May 5 (Reuters) - European shares gained on Tuesday on the back of a rise in Swiss bank UBS, although the Greek stock market fell due to renewed concerns over the country's debt situation.

Greece's benchmark ATG equity index fell 3 percent, underperforming a 0.6 percent rise in the pan-European FTSEurofirst 300 index.

Traders cited concerns that the International Monetary Fund (IMF) may cut a funding lifeline to Greece unless its European partners accept more debt writedowns as weighing on the Greek market, with Greek bond yields also rising.

Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel held a phone conversation on Monday night to discuss talks with international creditors.

Differences over pension and labour reforms have dogged negotiations between Tsipras's leftist government and its EU/IMF lenders. Athens, kept afloat by a 240 billion euro ($266 billion) bailout, needs fresh funds as it is running out of cash.

Nevertheless, many traders still said new economic stimulus measures from the European Central Bank (ECB) were helping limit any damage to other European stock markets caused by Greece.

"The Greeks are not playing ball particularly well, but there's still a feeling among investors that they will somehow muddle through and arrive at another deal," said Hantec Markets' analyst Richard Perry.

While Athens' ATG equity index has fallen around 3 percent since the start of 2015, the FTSEurofirst 300 has advanced around 16 percent. The FTSEurofirst hit a 2015 peak of 1,653.85 points last month, its highest level in more than 14 years.

Record (LSE: REC.L - news) -low interest rates set by the ECB, coupled with its plans to buy back government bonds, have pushed investors towards the better returns available from stocks compared with bonds and cash.

Germany's DAX, which hit a record 12,390.75 points last month, was up 0.7 percent at 11,705.27 while France's CAC rose 0.6 percent.

Evidence of solid corporate earnings has helped keep major European markets afloat, and UBS rose 6 percent after posting its highest quarterly profit in nearly five years.

"The numbers looked good across the board. The revenues were strong and the fund management division performed well," said Clairinvest fund manager Ion-Marc Valahu, commenting on UBS.

According to Thomson Reuters StarMine data, 62 percent of companies in the pan-European STOXX 600 index have met or beaten expectations with their first-quarter results.

"Assuming no external shocks materialise, euro zone earnings should recover further, supporting valuations," said SocGen (Paris: FR0000130809 - news) 's head of global research Patrick Legland.

($1 = 0.9018 euros)

Europe bourses in 2015: http://link.reuters.com/pap87v

Today's European research round-up (Additional reporting by Alistair Smout; Editing by David Holmes)