World stocks cruise to best week since August

Global stock markets cruised towards their best week since August on Friday, with sentiment in global markets underpinned by Donald Trump's decisive US election victory, while China unveiled measures to support its flagging economy.

A day after the US Federal Reserve delivered a quarter-point rate cut, as anticipated, focus turned back to the fallout of Tuesday's US election as well as headlines out of Beijing.

The yuan weakened as China unveiled details of its plans to stimulate the world's second-largest economy.

US stock futures were mostly flat , while Europe's STOXX index was a touch lower. Japan's Nikkei closed 0.3 per cent higher.

The modest moves masked what has been a generally strong week in stock markets, led by Wall Street shares, as Trump's election win stoked expectations of lighter regulation and tax cuts that could further boost the US economy.

The S&P 500 stock index is up over four per cent 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 three per cent and stands just shy of record highs.

"What you are going to get because of the clean sweep - is a mandate to improve the US 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 US stocks. The US market has potential."

Elsewhere, Germany's DAX stock index was a tad lower a day after posting its best daily performance of 2024 so far , helped by expectations that Germany could scrap its debt brake.

China will let local governments issue an additional six trillion yuan ($A1.3 trillion) in bonds to swap for off-balance sheet or "hidden" debt over three years, an official said on Friday, in a crucial step to lower systemic risks in the flagging economy.

Optimism over stimulus measures from China, especially as Trump's win raises the prospect of sharp tariff hikes, has buoyed Chinese stocks.

Mainland blue chips rose three per cent on Thursday but were down one per cent on Friday, as was Hong Kong's Hang Seng, in a sign of some caution ahead of the announcement.

The offshore Chinese yuan was also 0.3 per cent softer at 7.1717 per dollar. China-exposed European luxury and mining stocks each fell over two per cent.

DBS's China equity strategist James Wang said in a note that Chinese stocks are "skewed to the downside in the near term, and the market is not fully pricing in a 60 per cent tariff implication".

US Treasury yields were broadly lower after Fed Chair Jerome Powell on Thursday signalled continued, patient policy easing.

Ten-year bond yields were last down almost five basis points on the day at 4.29 per cent, having reversed sharp rises seen following the US election result.

Powell said Tuesday's election, which will put in the White House a president who has pledged widespread deportation of immigrants, broad-based tariffs and tax cuts, would have no "near-term" impact on US 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 US dollar index, which measures the currency against six major peers, ticked up slightly to 104.48, but that followed a 0.7 per cent drop on Thursday, its biggest since August 23. On Wednesday, it soared 1.53 per cent, 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 dipped around 0.2 per cent each against the dollar , while the dollar slipped 0.4 per cent to 152.35 yen.

Bitcoin was flat at around $US76,000, following a nearly 10 per cent surge this week, hitting a record peak of $US76,980 on Thursday. Trump has vowed to make the United States "the crypto capital of the planet".

And after a rollercoaster week, gold fell 0.7 per cent to $US2,688. It slumped more than three per cent on Wednesday, but bounced 1.8 per cent overnight. Last week it surged to an all-time high of $US2,790.15.

Brent crude oil futures fell 1.4 per cent to $US74.55 and US West Texas Intermediate crude slumped 1.7 per cent to $US71.14.