* Greece makes successful return to bond markets
* Fed minutes prop up world equities
* Earlier gains in European shares fizzle out
* Equities best asset class - Hampstead Capital's van Dam
By Sudip Kar-Gupta
LONDON, April 10 Greece's much-heralded return
to the bond market buoyed euro zone debt on Thursday,
outperforming flat equity markets as gains driven by easing U.S.
interest rate concerns fizzled out.
Just two years after being at the epicentre of the euro
zone's sovereign debt crisis, Greece drew solid demand at a
five-year bond sale that aimed to raise 3 billion euros and
offered a yield of 4.95 percent, beating Athens' 5 percent
The country's deputy prime minister Evangelos Venizelos said
the sale had been at least eight times oversubscribed.
Global equities were more subdued, giving up gains spurred
by minutes from the Federal Reserve's last meeting, which
suggested officials would be cautious about raising interest
Financial markets pushed out expectations of a first Fed
rate hike by about six weeks, to July 2015, trading in
interest-rate futures showed.
That weighed on the dollar, which fell to a three-week low
versus the yen and the Swiss franc on Thursday while gold
rose nearly 1 percent to a 2 1/2 week high at $1,323.50 an
Futures on the U.S. S&P equity index were down 0.2
percent while futures on the Dow Jones index edged up by
0.1 percent, pointing to a flat start for Wall Street after
gains of more than 1 percent on Wednesday following the Fed
In Europe, investors looked optimistically to Greece's
successful bond market return for further evidence that the euro
zone's economic recovery is gathering pace.
Commerzbank strategist Michael Leister said the sale showed
Greece was on track in its fightback from a deep economic slump.
"It's not a particularly cheap deal for them but they are on
the right track and it shows the debt crisis has eased
significantly," he said.
SteppenWolf Capital chief investment officer Phoebus
Theologites was more circumspect, pointing out that Greek
unemployment remained stubbornly high and that Greek bonds were
a better deal last year when they offered yields at 11 percent.
"When they were cheap at 11 percent yield, it was a
slam-dunk trade. But this time around, we consider that the hunt
for yield has made the fixed income market frothy and, for this
reason, we cannot bring ourselves to buy the debt of a country
with unemployment at nearly 30 percent," he said.
The Greek bond sale boosted peripheral euro zone bond
markets but had little impact on European shares.
The MSCI Europe equity index rose 0.2
percent, in line with the global MSCI All-Country World index
and the MSCI World Index, which
only tracks stocks from developed economies.
However, Hampstead Capital hedge fund manager Lex van Dam
said equities remained his preferred asset class.
He said world stock markets remained buoyed by the efforts
of the Fed and other major central banks to support economic
growth and keep interest rates low.
"This does continue to make me believe that equities are the
best play in town."
The MSCI Emerging Market index rose 0.6 percent.
A drop in China's exports stoked concerns about demand in
the world's second-biggest economy, though, and pushed the oil
price down towards $107 a barrel.
The fall in Chinese exports last month marked the first time
they have declined for two months in a row since 2009. China's
imports slumped 11 percent last month, data showed, providing
another source of concern, although analysts said the trade data
may have been distorted by over-invoicing last year.
($1 = 0.7234 euros)
(additional reporting by Hideyuki Sano, Blaise Robinson, Tricia
Wright and Emelia Sithole; Editing by Toby Chopra and Susan