* Mining stocks rally, prop up European equities
* Athens’ ATG market touches three-year lows
* Europe bourses in 2015: link.reuters.com/pap87v
* Asset performance in 2015: link.reuters.com/gap87v
By Sudip Kar-Gupta
LONDON, June 18 (Reuters) - A rise in mining shares enabled European stock markets to recover ground on Thursday, although the Athens bourse touched three-year lows on mounting worries over Greece’s debt crisis.
Athens’ benchmark ATG equity index touched its lowest level since late 2012, as worries intensified over a deadlock on talks between Greece and its creditors. The ATG edged back to close 0.4 percent higher but remains down 17 percent in 2015.
Greece must find a way out of the impasse by the end of June, when it is due a 1.6 billion euro ($1.8 billion) repayment to the International Monetary Fund, potentially leaving it bankrupt and on the verge of leaving the euro zone.
However, the broader, pan-European FTSEurofirst 300 index closed up 0.2 percent while the euro zone’s blue-chip Euro STOXX 50 index advanced 0.6 percent, with both recovering from losses in the previous session.
Germany’s DAX rose 1.1 percent, with the DAX some 10 percent below record highs set in April.
Mining stocks added the most points to the FTSEurofirst, buoyed by firmer copper prices and upbeat Chinese data.
Equity markets were also boosted after the U.S. Federal Reserve indicated that the pace of any U.S. interest rate hike would be slower than originally expected.
The Fed’s statement weakened U.S. Treasury yields, driving investors to the better returns on offer from stocks. Lower yields also typically mean lower borrowing costs for companies.
The FTSEurofirst is up around 10 percent this year, partly due to economic stimulus measures from the European Central Bank (ECB).
Some traders said the ECB’s support - which has also included help for Greek banks - was enough to ensure that Europe’s stock markets still had the momentum to move forward.
“Markets are continuing to be propped up by the ECB,” Hampstead Capital hedge fund manager Lex Van Dam said.
Others, however, remained more cautious on the near-term prospects for European equities given the Greek debt problems.
“What happens from here is hard to judge, with the situation changing on a daily and sometimes hourly basis, but what is clear is that some form of Greek default cannot be ruled out,” Columbia Threadneedle Investments head of European equities, Philip Dicken, said.
($1 = 0.8773 euros)
Today’s European research round-up (Additional reporting by Francesco Canepa; Editing by Mark Heinrich)