Markets rally on report Greece accepts creditor terms

Protesters wave and dance under a huge EU flag during a pro-Euro rally in front of the parliament building, in Athens, Greece, June 30, 2015. REUTERS/Yannis Behrakis

LONDON (Reuters) - Eurozone stocks and peripheral bonds rallied on Wednesday, extending gains after a report that Greece was ready to accept most conditions from its international creditors in order to reach a deal over its debt crisis.

Greek Prime Minister Alexis Tsipras was prepared to accept creditors' demands for a bailout with only a few minor changes, the Financial Times said.

The FTSEurofirst 300 <.FTEU3> extended gains, up 1.5 pct, with the euro zone blue-chip Euro STOXX <.STOXX50E> up 2.1 percent.

The euro trimmed losses against the dollar to trade at $1.11535 <EUR=>, flat on the day, while against the British pound it turned higher to trade 0.4 percent higher on the day <EURGBP=D4>.

German 10-year yields <DE10YT=TWEB> rose 4.3 basis points to a day's high of 0.82 percent while Spanish, Italian and Portuguese equivalents fell 6-8 bps to 2.22 percent <ES10YT=TWEB>, 2.25 percent <IT10YT=TWEB> and 2.90 percent <PT10YT=TWEB>, respectively.

(This version of the story corrects euro exchange rate to $1.11535)

(Reporting by London Markets Team; Editing by Lionel Laurent)