GLOBAL MARKETS-China rate cut, ECB stimulus hopes boost world markets

* Wall St set for 5th week of gains

* Shares soar on China rate cut, Draghi stimulus hopes

* Euro tumbles on Draghi; Brent briefly above $80 a barrel (Adds midday New York prices, Treasury prices)

By Michael Connor

NEW YORK, Nov 21 (Reuters) - World stock markets and oil prices rallied Friday, fueled by hopes for global growth following a surprise rate cut by China and as the European Central Bank indicated it would step up its asset purchases to boost the euro zone economy.

The jump in oil prices briefly took beaten-down Brent back above $80 a barrel. U.S. interest rates were little changed as the dollar gained and the euro declined.

Wall Street stock indices, including the Dow Jones industrial average and benchmark S&P 500 that closed at record peaks Thursday, advanced about one percent before easing back, but remained on track for a fifth week of gains.

"To the extent that you (have) duelling positive monetary policy statements in two places that we were concerned about a slowdown in economic growth, that's very good," said Art Hogan, chief market strategist at Wunderlich Securities in New York

The Dow Jones industrial average at midday was up 108.92 points, or 0.61 percent, to 17,827.92, the S&P 500 gained 0.56 percent, to 2,064.31 and the Nasdaq Composite added 0.44 percent, to 4,722.65.

European shares, oil and other growth-sensitive commodities all leapt on China's move to cut rates to 5.6 percent, following a string of recent data that showed its giant economy was heading for its worst year in almost a quarter of a century.

China's rate reductions were its first in more than two years. They came as ECB head Mario Draghi spoke of his determination to use more aggressive measures, such as large scale asset purchases, to ensure the euro zone doesn't slump into a new crisis.

Both the euro zone and China have lagged the momentum of the United States, stimulus-driven Japan and faster-growing Britain over the last month, but a ramping up of the ECB's rhetoric and Beijing's actions will stoke hopes of a turnaround.

Germany's DAX, France's CAC and the FTSE Eurofirst 300 were all up between 2 and 3 percent.

The MSCI world equity index, which tracks shares in 45 nations, was up 0.70 percent.

The dollar index was up 0.75 percent, as the euro gave up more than 1 percent and was last at $1.2393.

The yen was up against the dollar. Japanese Finance Minister Taro Aso said Friday the yen's fall over the past week was "too rapid." It was one of the strongest warnings against a weak yen since the aggressive stimulus efforts began two years ago and saw the currency leap off a 7-year low to 117.74

Benchmark 10-year U.S. Treasury notes were up 3/32 in price to yield 2.32 percent from 2.34 percent late Thursday.

The rate cut by China added to a positive mood among oil traders, many of whom expect the Organization of the Petroleum Exporting Countries to trim production at what looks to be a landmark meeting in Vienna on Nov. 27.

Oil jumped and Brent traded above $80 a barrel before easing, and was last up 7 cents to $79.41.

Copper and gold also got a lift, with the red metal up 0.66 percent. Spot gold climbed back over $1,200 before moderating gains to $1,195.30 an unce, retaining a $2 gain, as traders cheered the prospect of more global stimulus.

(Reporting by Michael Connor in New York; Editing by Bernadette Baum and Nick Zieminski)