LONDON, Nov 8 (Reuters) - European shares rose on Thursday after reassuring earnings from major companies including Siemens and Swiss Re.

  The FTSEurofirst 300 index was up by 0.5 percent at 1,104.35 points by 0708 GMT, recovering from a 1.4 percent loss during the previous session. The euro zone's blue-chip Euro STOXX 50 index rose 0.7 percent.

  Siemens led gainers across the region, up 3.3 percent, after it beat third-quarter earnings forecasts, while reinsurer Swiss Re rose 3.2 percent after it also beat and said it might pay a special dividend.

  " We really like Swiss Re and its promise of the special dividend. After such a sharp sell-off in the previous session, the bargain-hunters are coming back in," said MB Capital trading director Marcus Bullus.

By Sui-Lee Wee and Ben Blanchard

  BEIJING, Nov 8 (Reuters) - Outgoing Chinese President Hu Jintao warned on Thursday that corruption threatens the ruling Communist Party and the state, but said the party must stay in charge as it battles growing social unrest.

  He also promised political reform, but offered no dramatic changes and ruled out copying a Western style of government.

  In a " state of the nation" address to more than 2,000 hand-picked party delegates before he hands over power, Hu acknowledged growing public anger over graft and issues like environmental degradation had undermined the party's support and led to surging numbers of protests.

  " Combating corruption and promoting political integrity, which is a major political issue of great concern to the people, is a clear-cut and long-term political commitment of the party," Hu warned. He was opening a week-long congress at Beijing's Great Hall of the People that will usher in a once-in-a-decade leadership change in the world's second-largest economy.

  " If we fail to handle this issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state. We must thus make unremitting efforts to combat corruption," Hu said in a nearly two-hour speech.

  The run-up to the carefully choreographed meeting, at which Hu will hand over his post as party chief to anointed successor Vice President Xi Jinping, has been overshadowed by a corruption scandal involving one-time high-flying politician Bo Xilai.

  The party has accused him taking bribes and abusing his power to cover up his wife's murder of a British businessman in the southwestern city of Chongqing, which he used to run.

  While Hu did not name Bo - a man once considered a contender for top office himself - he left little doubt about the target of his comments.

  " All those who violate party discipline and state laws, whoever they are and whatever power or official positions they have, must be brought to justice without mercy," Hu told delegates, one of whom was his predecessor, Jiang Zemin.

  " Leading officials, especially high-ranking officials, must ... exercise strict self-discipline and strengthen education and supervision over their families and their staff and they should never seek any privilege."

  The New York Times said last month that the family of Premier Wen Jiabao had accumulated at least $2.7 billion in " hidden riches" , a report the Chinese government labelled a smear.

  JIANG'S CLOUT

  Hu entered the venue accompanied by Jiang, signalling the former president still wields considerable influence in the party and in the secretive deliberations to decide on the new leaders. As Hu delivered his speech under a massive, golden hammer and sickle, a healthy-looking Jiang sat flanked by senior members, party elders such as Li Peng and incoming leaders such as Xi.

  The congress ends on Nov. 14, when the party's new Standing Committee, at the apex of power, will be unveiled. Only Xi and his deputy Li Keqiang are certain to be on what is likely to be a seven-member committee, and about eight other candidates are vying for the other places.

  The congress also rubber-stamps the selection of about two dozen people to the party's Politburo, and approves scores of other appointments, including provincial chiefs and heads of some state-owned enterprises.

  " We must uphold the leadership of the party," Hu said.

  He also named health care, housing, the environment, food and drug safety and public security as areas where problems had " increased markedly" .

  The meeting is a chance for Hu to cement his legacy before retirement and ensure a smooth handover of power, and his prime-time speech was a chance to push his achievements and perhaps help steer a course going forward.

  " It was a rather conservative report," said Jin Zhong, the editor of Open Magazine, an independent Hong Kong publication that specialises in Chinese politics. " There's nothing in there that suggests any breakthrough in political reforms."

  While Hu promised unspecified " reforms to the political structure" and more encouragement of debate within the party, he gave no hint that China would allow broader popular participation.

  " We should ... give full play to the strength of the socialist political system and draw on the political achievements of other societies. However, we will never copy a Western political system," Hu said.

  While Hu will step down as party leader, Xi will only take over state duties at the annual meeting of parliament in March.

  Just weeks after anti-Japan riots swept city streets following a row over disputed islands, Hu also said China should strengthen the armed forces, protect its maritime interests and be prepared for " local war" in the information age.

  " We should enhance our capacity for exploiting marine resources, resolutely safeguard China's maritime rights and interests and build China into a maritime power," he said.

  China is also locked in dispute with Southeast Asian neighbours over areas of the South China Sea. Relations with the United States have been bogged down by accusations of military assertiveness in the region from both sides.

  The government has tightened security in the run-up to the congress, even banning the flying of pigeons in the capital, and has either locked up or expelled dozens of dissidents it fears could spoil the party.

  DRAGGED AWAY

  Security was especially tight on Thursday around the Great Hall and Tiananmen Square next door, the scene of pro-democracy protests in 1989 that were crushed by the military.

  Police dragged away a screaming protester as the Chinese national flag was raised at dawn.

  The party, which came to power in 1949 after a long and bloody civil war, has in recent years tied its legitimacy to economic growth and lifting hundreds of millions out of poverty.

  Hu said China's development should be " much more balanced, coordinated and sustainable" , and it should double its 2010 GDP and per capita income by 2020, as previous targets have implied.

  But China experts say that unless the new leadership pushes through stalled reforms, the nation risks economic malaise, deepening unrest, and perhaps even a crisis that could shake the party's grip on power.

  Chinese growth slowed for a seventh straight quarter in July-September, missing the government's target for the first time since the depths of the global financial crisis, but other data point to a mild year-end rebound.

  Advocates of reform are pressing Xi to cut back the privileges of state-owned firms, make it easier for rural migrants to settle permanently in cities, fix a fiscal system that encourages local governments to live off land expropriations and, above all, tether the powers of a state that they say risks suffocating growth and fanning discontent.

LONDON, Nov 8 (Reuters) - Britain's top share index moved higher on Thursday, recovering after sharp falls in the previous session as investors sought out some bargains, supported by a rise in U.S. stock futures.

  At 0807 GMT, the FTSE 100 index was up 26.70 points, or 0.5 percent, at 5,818.33, having dropped 1.6 percent on Wednesday as concerns over growth in Europe and the United States swamped initial relief that the U.S. presidential election had been settled quickly.

  Miners led the bounce back after falling sharply on Wednesday, helped by a recovery from two-month lows by copper prices.

  Another big batch of mixed corporate earnings news provided some other blue chip features, with sugar group Tate & Lyle the main FTSE 100 faller, down 1.8 percent after results.

  Investors will look for direction later on Thursday from the latest Bank of England and European Central Bank rate-setting meetings. (Reporting by Jon Hopkins editing by Simon Jessop)

* Dollar index holds near two-month high, weighing on gold
* Spot gold neutral in $1,702-$1,734/oz range - technicals
* Coming up: ECB rate decision 1245 GMT

(Adds comments updates prices)
By Rujun Shen
SINGAPORE, Nov 8 (Reuters) - Gold traded little changed on
Thursday below the 2-1/2-week high hit in the previous session
after U.S. President Barack Obama was re-elected, as a strong
dollar largely put off buyers.
Obama's re-election gave markets a boost by ending weeks of
political uncertainty, but now investors have shifted their
focus to the " fiscal cliff" looming over the world's biggest
economy: nearly $600 billion tax hikes and spending cuts which,
if left unchanged, will begin in early 2013 and possibly push
the fragile U.S. economy into deep recession.
Worries about the fiscal cliff are supportive of safe-haven
gold, but a strong dollar, which hit a two-month high against a
basket of major currencies in the previous session, curbed
bullion's gains by making it more expensive for buyers holding
other currencies.
" The dollar serves as a barometer of overall global risk,"
said Jeremy Friesen, commodity strategist at Societe Generale in
Hong Kong.
" Now the global risk has moved to centre on the U.S. and
what it means for that barometer becomes a little messy and hard
to tell. The dollar should weaken as the Fed offsets any
slowdown, which I expect to be the end result, but in the near
term if the market is nervous, it will bid up the dollar."
Spot gold was little changed at $1,717.79 an ounce by
0742 GMT, after rising to a 2-1/2 week high of $1,731.40 in the
previous session.
U.S. gold inched up 0.3 percent to $1,718.30.
Technical analysis suggested that spot gold looks neutral in
the range of $1,702-$1,734 an ounce during the day, said Reuters
market analyst Wang Tao.

Investors are now awaiting results of a European Central
Bank policy meeting. The bank is expected to leave interest
rates unchanged, even as the latest data showed a slowdown in
Germany's manufacturing sector.

The lingering euro zone debt crisis and worries about the
U.S. fiscal problems kept investors interested in gold.
Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, rose to 1,337.205 tonnes by
Nov. 7, its second-highest level after the all-time high of
1,340.521 tonnes hit in early October.
But buying slowed in Asia's physical gold market, as prices
have risen more than 2 percent this week.
" No one is buying at this level, as people have bought a lot
when prices dipped below $1,700," a Hong Kong-based gold dealer
said.

Precious metals prices 0742 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1717.79 1.48 +0.09 9.85
Spot Silver 31.83 0.07 +0.22 14.95
Spot Platinum 1537.24 -1.75 -0.11 10.35
Spot Palladium 605.47 -4.00 -0.66 -7.21
COMEX GOLD DEC2 1718.30 4.30 +0.25 9.67 12680
COMEX SILVER DEC2 31.84 0.18 +0.57 14.06 5664
Euro/Dollar 1.2760
Dollar/Yen 79.85
COMEX gold and silver contracts show the most active months

(Editing by Himani Sarkar)

(Corrects price move of 10-year yield to a drop of 1.5 basis points)

  * Curve flattens as strong 40-year sale lifts superlong tenor

  * 10-yr futures close at session high, 3-month peak

  By Lisa Twaronite

  TOKYO, Nov 8 (Reuters) - Japanese government bonds rallied across the curve on Thursday, sending benchmark yields to a 7-month low, as investors sought safe havens on fears about the looming U.S. fiscal crisis and as strong demand at a 40-year sale bolstered the recently languishing long end.

  President Obama is facing a political showdown over the so-called " fiscal cliff" of about $600 billion in expiring tax cuts and spending reductions due to take effect in January. Some analysts warn the drop could hit the U.S. economy harder than expected.

  These concerns helped support demand at the Ministry of Finance's offering of 400 billion yen worth of 40-year debt with a coupon of 2.0 percent, reopening the number 5 issue. It produced a highest accepted yield of 2.115 percent, with 97.8666 percent of the bids accepted at that yield.

  The sale drew bids of 3.82 times the amount offered, up from the previous sale's bid-to-cover ratio of 3.48.

  " The 40-year auction was extremely strong today. The bid-to-cover was higher than normal, and also we saw solid bids from the life insurance companies," Tadashi Matsukawa, head of Japan fixed income at Pinebridge Investments in Tokyo.

  Obama's win over challenger Mitt Romney also removed some investors' fears that the U.S. Federal Reserve would end its commitment to easy policy before mid-2015, he said.

  " That is one reason people feel more comfortable" with bonds, he said.

  Grim Japanese economic data also underpinned demand for fixed-income assets. Japan's core machinery orders plunged more than expected in September and its current account surplus also fell more than forecast, following a sharp drop in exports.

  The 10-year yield slipped 1.5 basis points to 0.745 percent, its lowest level since April 7.

  Ten-year JGB futures ended up 0.17 point at their session high of 144.50, their highest level since Aug. 3.

  The yield curve flattened as the superlong sector reversed the previous session's losses, with yields on 30-year bonds losing 3 basis points to 1.920 percent, their lowest since Oct. 22, while yields on 20-year debt also fell 3 basis points to 1.660 percent, their lowest since Sept. 24.

  " The mood has turned to risk-off as investors ponder the fiscal cliff. Even though the 10-year sector is expensive, it's the most liquid and there are still buyers," said a fixed-income fund manager at an asset management firm in Tokyo.

  " Should we buy, too? We are baulking, but what else can we do?" he added. (Reporting by Lisa Twaronite)

HONG KONG, Nov 8 (Reuters) - Hong Kong shares suffered their worst day since July 23 on Thursday, as investors took profits on recent outperformers and turned their attention to the prospect of U.S. fiscal woes roiling financial markets.

  The Hang Seng Index fell 2.4 percent to 21,566.9 points, reversing the benchmark's strong start to November. The China Enterprises Index of the top Chinese listings in Hong Kong sank 2.7 percent.

  In the mainland, the CSI300 Index of the top Shanghai and Shenzhen listings suffered a fourth-straight loss, sliding 1.8 percent. The Shanghai Composite Index lost 1.6 percent. The falls were the worst since Oct. 26.

  HIGHLIGHTS:

  * Chinese oil majors came under pressure after oil prices dived 4 percent overnight on growing economic headwinds on both sides of the Atlantic coast. Petrochina Co Ltd and CNOOC Ltd each fell 3 percent, while China Petroleum & Chemical Corp (Sinopec) lost 1.7 percent.

  * But the Chinese railway sector bucked broader market weakness after mainland news outlets reported that Beijing could raise its investment in the sector. China Railway Group rose 2.2 percent, while China Railway Construction gained 1 percent.

  * Thursday's losses came as China formally started a once-in-a-decade political transition with the 18th Communist Party congress meeting in Beijing, where outgoing President Hu Jintao vowed reforms to make the currency and interest more market-based, boost overseas investments and plough more state funds into industry as part of plans to keep GDP on track to double in size by 2020.

  DAY AHEAD:

  * Beijing will post a fresh batch of economic data, starting with inflation, urban investment, industrial output and retail sales on Friday. Trade data is expected on Saturday, with money supply and loan growth at any time between Nov. 10 and Nov. 15.

HONG KONG, Nov 8 (Reuters) - Chinese shares fell the most in almost two weeks on Thursday, tracking an Asia-wide drop in riskier assets, with energy stocks the biggest losers after oil prices dived 4 percent overnight.

  The CSI300 Index of the top Shanghai and Shenzhen listings closed down 1.8 percent at 2,245.4, suffering a fourth-straight loss. The Shanghai Composite Index lost 1.6 percent.

  Thursday's losses were the worst since Oct. 26.

  The fall came as Chinese President Hu Jintao vowed reforms to make the currency and interest more market-based, boost overseas investments and plough more state funds into industry as part of plans to keep GDP on track to double in size by 2020, in remarks prepared for delivery at the Communist Party Congress meeting.

  (Reporting by Clement Tan Editing by Sanjeev Miglani)

By Randy Fabi and Aisha Chowdhry

  ISLAMABAD (Reuters) - The roars celebrating the re-election of U.S. President Barack Obama on television give Mohammad Rehman Khan a searing headache, as years of grief and anger come rushing back.

  The 28-year-old Pakistani accuses the president of robbing him of his father, three brothers and a nephew, all killed in a U.S. drone aircraft attack a month after Obama first took office.

  " The same person who attacked my home has gotten re-elected," he told Reuters in the capital, Islamabad, where he fled after the attack on his village in South Waziristan, one of several ethnic Pashtun tribal areas on the Afghan border.

  " Since yesterday, the pressure on my brain has increased. I remember all of the pain again."

  In his re-election campaign, Obama gave no indication he would halt or alter the drone programme, which he embraced in his first term to kill al Qaeda and Taliban militants in Pakistan and Afghanistan without risking American lives.

  Drone strikes are highly unpopular among many Pakistanis, who consider them a violation of sovereignty that cause unacceptable civilian casualties.

  " Whenever he has a chance, Obama will bite Muslims like a snake. Look at how many people he has killed with drone attacks," said Haji Abdul Jabar, whose 23-year-old son was killed in such a bombing.

  Analysts say anger over the unmanned aircraft may have helped the Taliban gain recruits, complicating efforts to stabilise the unruly border region between Pakistan and Afghanistan. That could also hinder Obama's plan to withdraw U.S. troops from Afghanistan in 2014.

  Obama authorised nearly 300 drone strikes in Pakistan during his first four years in office, more than six times the number during the administration of George W. Bush, according to the New America Foundation policy institute.

  Since 2004, a total of 337 U.S. drone strikes in Pakistan have killed between 1,908 and 3,225 people.

  The institute estimates about 15 percent of those killed were non-militants, although that percentage has declined sharply to about 1-2 percent this year. Washington says drone strikes are very accurate and cause minimal civilian deaths.

  The Pakistani government says tens of thousands of Pakistanis have been killed in the fight against militants. Many were civilians caught in suicide bombings. Others were killed by the Pakistani army.

  " NO DIFFERENCE"

  Getting accurate data on casualties and the effects of drones is extremely difficult in the dangerous, remote and often inaccessible tribal areas. The Taliban often seal off the sites of strikes.

  While the aerial campaign has weakened al Qaeda, its ally, the Pakistani Taliban, remains a potent force despite a series of Pakistan army offensives against their strongholds in the northwest.

  Seen as the biggest security threat to the U.S.-backed Pakistani government, that faction of the Taliban is blamed for many of the suicide bombings across Pakistan, and a number of high profile attacks on military and police facilities.

  " We are amazed that Obama has been re-elected. But for us there is no difference between Obama and Romney both are enemies. And we will keep up our jihad and fight alongside our Afghan brothers to get the Americans out of Afghanistan," said Pakistan Taliban spokesman Ehsanullah Ehsan.

  On Thursday, a suicide bomber rammed the gates of a military base in Pakistan's biggest city, Karachi, killing at least one soldier and wounding more than a dozen people.

  Pakistanis were largely indifferent in the run-up to Tuesday's election, expecting little change to the drone attacks regardless of whether Obama or Republican challenger Mitt Romney won.

  " Any American, whether Obama or Mitt Romney, is cruel," Warshameen Jaan Haji, whose neighbourhood was struck by a drone last week, told Reuters on the eve of the election. " I lost my wife in the drone attack and my children are injured. Whatever happens, it will be bad for Muslims."

  Pakistani politician Imran Khan, a vocal critic of U.S. drone strikes, said he believed Obama stepped up the attacks in his first term so he wouldn't look weak on national security.

  " I think Obama essentially has an anti-war instinct," he told Reuters. " Without the worry of being re-elected, he will de-escalate the war, including the use of drones. This is positive."

  But for Mohammad Khan, who is not related to the former cricketer, the damage is already done.

  The February 2009 drone attack that destroyed his home left him as the main provider for 13 family members, forcing him to move to Islamabad and work with a real estate company.

  " When the Sandy hurricane came, I thought that Allah would wipe away America," he said. " America just wants to take over the world."

  (Additional reporting by Hafiz Wazir in Wana, Haji Mujtaba in Miranshah and Mehreen Zahra-Malik in Islamabad Editing by Ron Popeski and Robert Birsel)

By Matt Spetalnick and Steve Holland

  WASHINGTON (Reuters) - President Barack Obama had little time to savour victory on Wednesday after voters gave him a second term in the White House where he faces urgent economic challenges, a looming fiscal showdown and a still-divided Congress able to block his every move.

  Despite a decisive win over Republican Mitt Romney in Tuesday's election, Obama must negotiate with a Republican majority in the House of Representatives to try to overcome the partisan gridlock that gripped Washington for much of his first term.

  The Democratic president's most immediate concern is the " fiscal cliff" of scheduled tax increases and spending cuts that could crush the U.S. economic recovery if it kicks in at the start of next year.

  The prospect of Obama and Congress struggling to agree on the issue weighed heavily on global financial markets on Wednesday and helped send Wall Street stocks into a post-election swoon.

  Obama also faces challenges abroad including the West's nuclear standoff with Iran, the civil war in Syria, the winding down of the war in Afghanistan and dealing with an increasingly assertive China.

  At home, Obama's triumph could embolden him in his dealings with the Republicans, who were in disarray after failing to unseat him or reclaim control of the U.S. Senate, an outcome many conservatives had predicted. Their party is now headed for a period of painful soul-searching.

  Voters gave Obama a second chance despite stubbornly high unemployment and a weak economic recovery, but they preserved the status quo of divided government in Washington.

  Obama's fellow Democrats retained control of the Senate and Republicans kept their majority in the House, giving them power to curb the president's legislative ambitions on everything from taxes to immigration reform.

  This is the political reality facing Obama - who won a far narrower victory over Romney than his historic 2008 victory over John McCain when he became the country's first black president.

  He headed back to Washington on Wednesday after basking in the glow of his re-election together with thousands of elated supporters at a victory rally in his hometown of Chicago in the early hours of the morning.

  " We can seize this future together because we are not as divided as our politics suggests," Obama told the gathering.

  Before leaving Chicago, he visited his downtown campaign headquarters to thank staff and volunteers.

  Romney, a multimillionaire former private equity executive, came back from a series of campaign stumbles to fight a close battle after besting Obama in the first of three presidential debates.

  But the former Massachusetts governor failed to convince voters of his argument that his business experience made him the best candidate to repair a weak U.S. economy.

  CALL TO CONGRESS LEADERS

  Trying to make good on his promise to seek compromise, Obama followed up in telephone calls with congressional leaders, including the two top Republican lawmakers, John Boehner and Mitch McConnell, to express his determination to work together.

  " The president reiterated his commitment to finding bipartisan solutions to: reduce our deficit in a balanced way, cut taxes for middle-class families and small businesses and create jobs," a White House official said.

  The problems that dogged Obama in his first term, which cast a long shadow over his 2008 campaign message of hope and change, still confront him. He must tackle the $1 trillion annual deficits, rein in the $16 trillion national debt and overhaul expensive social programs.

  The most urgent focus for Obama and U.S. lawmakers will be to deal with the " fiscal cliff," a mix of tax increases and spending cuts due to extract some $600 billion from the economy starting early next year, barring a deal with Congress. Economists warn it could push the United States back into recession.

  Obama has pledged to increase tax rates on Americans earning more than $250,000 as a part of his " balanced approach" to deficit reduction - something Republicans still vow to resist.

  In remarks to reporters, House Speaker Boehner struck a conciliatory tone but stuck to the Republican position that they will consider boosting revenues to help reduce deficits, but only as a " by-product" of tax reform that lowers rates and eliminates loopholes and deductions.

  Boehner said lawmakers and Obama should find a short-term solution to avoid the fiscal cliff and work on a long-term debt reduction plan in 2013.

  " In order to garner Republican support for new revenues, the president must be willing to reduce spending and shore up the entitlement programs that are the primary drivers of our debt," Boehner said.

  Senate Republican leader McConnell gave no sign he was willing to concede his conservative principles.

  " The voters have not endorsed the failures or excesses of the president's first term, they have simply given him more time to finish the job they asked him to do together with a Congress that restored balance to Washington after two years of one-party control," McConnell said.

  Vice President Joe Biden told reporters the election delivered a mandate on moving closer to the administration's views on tax policy, and Republicans would have to do some " soul-searching" about issues they would be willing to compromise on, according to a pool report.

  Post-election concern about U.S. fiscal problems contributed to a fall in global financial markets as jittery investors scrambled for less-risky assets.

  All three major U.S. stock indexes fell more than 2 percent, with the Dow Jones industrial average losing more than 300 points and the S& P 500 posting its biggest drop since June. Euro zone debt worries were also a factor in the market decline.

  COMFORTABLE WIN IN ELECTORAL COLLEGE

  The nationwide popular vote in Tuesday's election was extremely close with Obama taking about 50 percent to 48 percent for Romney after a campaign in which the candidates and their party allies spent a combined $2 billion. But in the state-by-state system of electoral votes that decides the White House, Obama notched up a comfortable victory.

  By late on Wednesday, he had 303 electoral votes, well over the 270 needed to win, to Romney's 206. Florida's close race was not yet declared, leaving its 29 electoral votes still to be claimed.

  The Republican Party, after losing the past two presidential contests, is expected to analyze at length what went wrong and how to fix it, especially how it has alienated Hispanic voters who were an important constituency in Obama's victory.

  Some critics have argued that the Republican Party, with its conservative Tea Party faction, have moved too far from the American mainstream to attract enough independent voters to reclaim the White House.

  " The fact is, Republicans are going to have to do a lot of rethinking at the presidential level," Newt Gingrich, a former House speaker who lost the Republican nominating race to Romney, told CBS's " This Morning" program.

  Obama's win put to rest the prospect of wholesale repeal of his 2010 healthcare reform law.

  Obama, who took office in 2009 as the ravages of the financial crisis were hitting the U.S. economy, must continue his efforts to ignite strong growth and recover from the worst downturn since the Great Depression of the 1930s. An uneven recovery has been showing some signs of strength but the country's jobless rate, at 7.9 percent, remains stubbornly high.

  Obama may now reshuffle his cabinet. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton plan to step down soon.

  Democrats widened their control of the 100-member Senate by two. The Republican majority in the 435-member House means that Congress still faces a deep partisan divide.

  " That means the same dynamic. That means the same people who couldn't figure out how to cut deals for the past three years," said Ethan Siegel, an analyst who tracks Washington politics for institutional investors.

  (Reporting by staff in Washington and other bureaus Editing by Alistair Bell and Eric Walsh)

LONDON, Nov 8 (Reuters) - European stock index futures pointed to a higher open on Thursday, with a sharp decline in the previous session prompting some investors to buy cheaper stocks, although gains are likely to be limited.

  At 0701 GMT, futures for Euro STOXX 50, Germany's DAX and France's CAC were 0.5 to 0.7 percent higher.