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UPDATE 2-Swiss blue-chip index rises as stocks banned from EU exchanges

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ZURICH/LONDON, July 1 (Reuters) - Swiss blue-chip stocks rose on Monday, the first day they were banned from trading on European Union exchanges, as investors cheered a ceasefire in the trade war between Washington and Beijing.

The Swiss Market Index was up 0.6% at 0826 GMT, in line with broader gains across Europe, as investors bought assets considered riskier after Washington and Beijing agreed to resume trade talks, averting a further escalation of a protracted dispute.

The gains came on the first day Swiss shares were blocked from trading on EU exchanges after talks to resolve a dispute between Brussels and Switzerland collapsed.

Switzerland retaliated by banning almost 300 shares in Swiss companies, including Nestle, Roche and Novartis , from being traded at EU stock exchanges, which normally see around 30% of the volume in Zurich-listed shares.

On Monday, no major disruption in trading or immediate impact on prices was seen, although some dealers said volumes and liquidity might be lower than usual.

Last week, many European stock investors and brokers were rushing to find workarounds before the measures were put in place.

Gilles Guibout, fund manager at AXA Investment Managers in Paris, said his company had made a "few adjustments" but nothing fundamentally different to continue to trade Swiss shares.

Angelo Meda, head of equities at Banor SIM in Milan, said his company had always used the SIX Swiss Exchange to trade Swiss shares, so it was seeing no impact.

A trader in Frankfurt said it was business as usual, with his firm trading Swiss stocks over the counter.

(Reporting by Michael Shields and Paul Arnold in Zurich, Danilo Masoni in Milan, Thyagaraju Adinarayan in London, Hakan Ersen in Frankfurt; writing by Josephine Mason in London; Editing by John Miller, Larry King)