By Johann M Cherian and Shashwat Chauhan

(Reuters) - Greek equities could regain the coveted developed market status by index provider FTSE Russell this week - a key step on the country's return to normalcy following a decade-long debt crisis and a move that could spur millions of dollars in inflows.

FTSE Russell could become the first among major index providers to re-classify Greek equities when it issues its country classification interim update on Tuesday. 

The index provider put Greece's stock market on a watch list for potential promotion from Advanced Emerging in October, adding it met all developed market criteria but one - credit worthiness of the economy was still seen as "speculative". 

"The fact that (FTSE Russell) put the country on the watch list and simultaneously said that they meet the criteria, suggests that there's a very reasonable chance that we might see that upgrade," said Georgios Leontaris, CIO for EMEA and Switzerland at HSBC Global Private Banking.

An upgrade would mark another step for the European nation which has tried to claw its way out of a severe economic meltdown and debt crunch in the wake of the Global Financial Crisis. Credit rating agency Moody's joined peers in March to lift Greek government bonds to "investment grade".

The FTSE Russell upgrade could bring net passive inflows of about $400 million, Thea Jamison, managing director of CHANGE Global Investment estimated. Greece-based Hellenic Asset Management saw inflows between $250 million and $1 billion.

Analysts also noted it will be only a matter of time before other index providers also upgrade the country's stocks.

S&P Dow Jones Indices put Greek stocks on a watch list for a potential upgrade in 2025, but the main focus will be MSCI's market accessibility review later in the year that most fund managers keep a close track of.

The index providers are expected to issue their reports at a shaky times for global markets as expectations that a global trade war could weigh on economic growth have increased.

Greek blue-chips have lost over 10% in the last three sessions, but are still up around 0.5% for the year, compared to a more than 2% fall in the pan-European STOXX 600.