* FTSEurofirst 300 up more than 1 pct
* Yellen comments lift global equities
* Germany's Metro surges on demerger plans
* Steelmakers rise on consolidation hopes (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report. Adds details, update prices)
By Sudip Kar-Gupta
LONDON, March 30 (Reuters) - European shares rose on Wednesday after Federal Reserve Chair Janet Yellen called for caution in raising U.S. interest rates, boosting equities, while German retailer Metro surged on demerger plans.
The pan-European FTSEurofirst 300 index was up 1.4 percent by 1017 GMT. Germany's DAX gained 1.7 percent while the euro zone's blue-chip Euro STOXX 50 index rose 1.6 percent.
The FTSEurofirst is still down 7 percent since the start of 2016, however, due to concerns about a China-led global economic slowdown.
Such a risk was one reason why Yellen said on Tuesday the U.S. central bank should proceed only cautiously as it looks to raise interest rates.
Hampstead Capital hedge fund manager Lex Van Dam said Yellen's comments highlighted how measures from the Fed and European Central Bank (ECB) to try to keep rates low were hitting returns on bonds and cash, and pushing investors towards the better returns on offer from stocks.
"Equity markets remain supported by the global central banks - the economy might not be in great shape but with real rates in negative territory, there are not many other places to find a return," said Van Dam.
Yellen's comments weakened the U.S. dollar on currency markets, which in turn supported the shares of mining and energy companies since a weaker dollar makes commodities more affordable for investors holding other currencies.
Steelmakers rose after Tata Steel said it wanted to exit the British market, sparking hopes of European consolidation. Shares in ThyssenKrupp were up 6.4 percent, ArcelorMittal added 3.3 percent and Outokumpu 6.4 percent.
Metro also jumped 11 percent after the company proposed to split itself in two, with its wholesale and food business transferred to a separate entity and the consumer electronics business remaining part of the existing company.
French transport group Alstom also rose 3.7 percent as investors welcomed new financial targets.
Today's European research round-up
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Additional reporting by Danilo Masoni; Editing by Raissa Kasolowsky and Mark Potter