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China unveils steps to tackle 'hidden' debt of local

governments

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Treasury yields sag as Fed signals careful, patient easing

path

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World stocks up 3% this week

(Updates throughout, adds fresh comment, chart)

By Dhara Ranasinghe

LONDON, Nov 8 (Reuters) - Global stock markets cruised

towards their best week since August on Friday, with sentiment

underpinned by Donald Trump's decisive U.S. election victory,

while China kicked off a fresh round of fiscal support for its

flagging economy.

A day after the U.S. Federal Reserve delivered a

quarter-point rate cut, as anticipated, focus turned back to the

fallout of Tuesday's U.S. election as well as headlines out of

Beijing.

The offshore yuan weakened, while U.S.-listed shares of

Chinese firms and China exposed-sectors in Europe fell in a sign

of investor disappointment with China's stimulus news.

U.S. stock futures ticked lower, , Europe's

STOXX index eased 0.7%, while Japan's Nikkei closed

0.3% higher.

The modest moves masked what has been a generally strong

week for stocks, led by Wall Street shares, as Trump's election

win stoked expectations of lighter regulation and tax cuts that

could further boost the U.S. economy.

The S&P 500 stock index is up over 4% this week and

set for its best week in over a year, while MSCI's world stock

index is set for its best week since August with a gain of just

over 3% and stands just shy of record highs.

"What you are going to get because of the clean sweep - is a

mandate to improve the U.S. economy. So, taxes will come down,

bureaucracy will ease and regulation will become lighter," said

Guy Miller, chief markets strategist at Zurich Insurance Group.

"Between now and year-end, there is a tailwind for U.S.

stocks. The U.S. market has potential."

Elsewhere, Germany's DAX stock index fell a day after

posting its best daily performance of 2024 so far,

helped by expectations that Germany could scrap its debt brake.

CHINA DISAPPOINTS

China unveiled a 10 trillion yuan ($1.40 trillion) debt

package to ease local government financing strains and stabilise

flagging economic growth.

Finance Minister Lan Foan said more stimulus was coming,

with some analysts saying Beijing may not want to fire all its

financial weapons before Trump takes over officially in January.

Mainland blue chips, which rose 3% on Thursday,

fell 1% on Friday, as did Hong Kong's Hang Seng, in a

sign of some caution ahead of the announcement.

The offshore Chinese yuan was 0.3% softer at 7.1730 per

dollar. China-exposed European luxury and

mining stocks each fell over 3%.

"Unless there's more to come later this evening, today's

fiscal announcement is another disappointment for those

expecting substantial stimulus," said Capital Economics chief

Asia economist Mark Williams.

FED CUTS

U.S. Treasury yields were lower after Fed Chair Jerome

Powell on Thursday signalled continued, patient policy easing.

Its rate cut followed a quarter-point cut from the Bank of

England and a large half-point cut by Sweden also on Thursday.

Ten-year Treasury yields fell 3 basis points to 4.31%

, having reversed sharp rises seen following the U.S.

election result.

Powell said Tuesday's election result would have no

"near-term" impact on U.S. monetary policy.

"The Fed pointed to a more uncertain economic outlook and

inflation remaining elevated," said Mahmood Pradhan, head of

global macroeconomics at the Amundi Investment Institute.

"Together with a likely change in policy direction under the

new administration, we expect a more uncertain and measured pace

of easing next year."

The dollar index, which measures the currency against

six major peers, dipped to 104.36, following a 0.7% drop on

Thursday, its biggest since Aug. 23. On Wednesday, it soared

1.53%, the most in over two years, a sign of increased

volatility as investors assess the impact of the new Trump

administration's policies.

The euro and sterling were just a touch softer against the

dollar , while the dollar slipped almost 0.5%

to 152.31 yen.

Bitcoin was a touch firmer just above $76,000,

following a nearly 10% surge this week, hitting a record peak of

$76,980 on Thursday. Trump has vowed to make the United States

"the crypto capital of the planet".

And after a rollercoaster week, gold fell 0.6% to

$2,691. It slumped more than 3% on Wednesday, but bounced 1.8%

overnight. Last week it surged to an all-time high of $2,790.15.

Brent crude oil futures trimmed falls during London

trade and were last down 1% at $74.86, U.S. West Texas

Intermediate crude fell 1.2% to $71.45.