France draws over 31 bln euros of demand for post-election bond sale

* France launches 7 billion euro, 30-year bond sale

* Investors pile into bond, demand over 31 billion euros

* France's 10s/30s yield spread widest since Dec (Shanghai: 600875.SS - news) 2014

* Germany, Belgium among potential sellers of long-dated bonds

* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates with bond sale details)

By Abhinav Ramnarayan and Dhara Ranasinghe

LONDON, May 16 (Reuters) - France received more than 31 billion euros of orders for a new 30-year bond on Tuesday, highlighting strong demand for a sale seen as the first big test of sentiment after centrist Emmanuel Macron won the presidential election.

The 7 billion euro bond is being sold via a syndicate of banks and is expected to be priced later on Tuesday.

Investor (LSE: 0NC5.L - news) appetite for the bond, which analysts say was helped by a cheapening of French debt in past weeks, sparked an outperformance of 30-year French bond yields, which fell 3 basis points in late trade.

"The 30-year area has been relatively cheap so it is no surprise to see strong demand for this bond today," said Patrick Jacq, Europe rate strategist at BNP Paribas (LSE: 0HB5.L - news) .

Although French government bonds have rallied sharply since it became clear Macron would beat far-right leader Marine Le Pen to the presidency, longer-dated bonds had lagged the move.

France opened books on the deal around 0830 GMT on Tuesday, having recorded interest in excess of 18 billion euros even before it started taking orders.

The bond matures in May 2048, three years later than the current 30-year benchmark but still eligible for ECB purchases in June, according to Societe Generale (Swiss: 519928.SW - news) .

Analysts said the sale was also a barometer of investor sentiment towards France ahead of parliamentary elections in June that will determine whether Macron can govern with a majority.

Macron appointed a conservative prime minister on Monday in a move to broaden his political appeal and weaken his opponents before the two-round vote.

The sale could also indicate whether Japanese investors, key lenders to France, are returning.

"Japanese investors have been large buyers of French securities and given that the political risk has reduced, we should see a gradual return to this market," said Antoine Bouvet (LSE: 0HDU.L - news) , rates strategist at Mizuho.

Tuesday's sale will also demonstrate investor appetite for duration, particularly with other long-dated bond sales expected from Germany, euro zone bailout fund EFSF and possibly Belgium.

PLENTIFUL SUPPLY

Ahead of the sale the gap between 10- and 30-year French bond yields briefly reached 108 basis points, its widest since December 2014, as investors made room by selling some of their existing longer-dated French debt.

Germany is scheduled to sell 30-year bonds on Wednesday while Belgium has cancelled a bond auction for next week. Analysts said that may be because the Belgian debt agency is planning a 15- or 20-year bond sale this week.

The European Financial Stability Facility, the euro zone's bailout fund, is widely expected to sell long-dated bonds this week, while Slovenia was selling bonds maturing in 2027 and 2040 on Tuesday.

Elsewhere, further signs of strength in the euro zone economy and renewed confidence in the European project boosted sentiment towards lower-rated peripheral bonds.

Portugal's 10-year bond yield tumbled 9 bps to 3.29 percent , pushing the gap over German peers to its tightest in nine months at around 288 bps.

Italian bond yields fell 6 bps 2.21 percent, while the Italian/German 10-year yield gap dropped below 180 basis points for the first time in a week.

Bonds from the bloc's periphery tend to perform well on signs the euro zone economy is strengthening.

German Chancellor Angela Merkel and French president Macron agreed on Monday to draw up a roadmap to deeper European Union integration and opened the door to changing the bloc's treaties to facilitate ambitious reform.

"Given Macron's election, the unity we've seen in Europe around Brexit and positive growth data, we've been more constructive on the periphery," said Nicholas Wall, a portfolio manager at Old Mutual Global Investors.

"In terms of intra-Europe, we're definitely overweight peripherals versus the core market."

(Editing by Catherine Evans and Richard Lough)