* Bank stocks jump to three-month high
* Greek 10-year bond yield spread tightens below 800 bps
* Credit Suisse upgrades Greek equities
(Adds trader quote, share prices, yield spreads)
ATHENS, Feb 1 (Reuters) - Greek bank shares jumped more than 8 percent on Tuesday as bond yield spreads tightened below 800 basis points and traders anticipated positive news from an upcoming EU summit on the debt crisis. "Spreads are down, below 800 bps, ahead of an EU summit later this week where traders expect positive developments on the debt crisis. There is also short-covering," said investment adviser Theodore Mouratidis at Fortius Securities.
The bourse's banking index hit a three-month intraday high, outperforming the broader Greek market which was gaining 4.3 percent.
The premium investors' demand to hold lower-rated euro zone government bonds rather than German debt fell on Tuesday, after the release of strong economic data and details of Spanish savings banks exposure.
The yield on 10-year Greek government paper over bunds tightened to 796 basis points from 820 earlier in the day.
"Bank shares had been pounded as investors discounted restructuring with haircuts," another trader said.
Adding to improved sentiment, Credit Suisse upgraded Greek equities to "benchmark" from "underweight", citing cheap equity valuations and a range of supportive macroeconomic factors. (Reporting by George Georgiopoulos; Editing by Jon Loades-Carter)