By Tomasz Janowski

Seoul announced $11 billion in new spending and tax cuts and dismal Australian economic data cemented expectations that its central bank will slash rates again on Tuesday. In Europe, the Bank of England and the European Central Bank have both primed investors well for another round of cuts later this week.

The U.S. Federal Reserve and central banks in Japan, China and India all cut borrowing costs last week in an effort to shield their economies from the fallout from the crisis, which started when the U.S. housing boom turned sour.

The cuts and a barrage of initiatives to shore up banks and prime-pump sputtering economies, lifted the mood among battered investors, encouraging some to shop for bargains after world stock markets fell 20 percent in October alone, its worst month ever.

Asian stocks rose for the fifth trading day in a row, with the index of Asia-Pacific stocks outside Japan up 4.6 percent..

But economists say that while trillions of dollars in bank bailouts and stimulus packages may have averted a financial meltdown and may spare the world a repeat of the 1930s Great Depression, the economic outlook was grim.

"The focus this week is clearly on some of the major central banks and it is hard not to see the disease that started in the United States spreading to other economies," said Robert Rennie, chief currency strategist at Westpac in Sydney.

Many economists and more and more policymakers say that the world's top economic powers, the United States, much of Europe and Japan are already in recession and prospects for corporate earnings look equally dim.

About 60 percent of Wall Street firms that had so far reported quarterly earnings beat analysts' forecasts, according to Thomson-Reuters data. But the focus is on the outlook for next quarters and the damage inflicted by toxic debt linked to U.S. mortgages and sharply slowing economies worldwide.

This week investors will have results from major European banks such as UBS and BNP Paribas as well as industrial firms such as Cisco Systems to chew on.

In yet another sign that even new economic powerhouses such as India or China were hurt by the financial upheaval, a survey showed China's manufacturing sector weakened sharply in October, prompting officials to call for special efforts to prop up domestic consumption.

Australia, long sheltered from economic headwinds blowing from America thanks to windfall profits from the global commodities boom, on Monday reported retail sales fell in twice as much as expected in September and housing prices fell sharply in the third quarter. The data cemented expectations the central bank will slash rates by further half a percentage point to 5.5 percent, bringing the easing since September to 175 basis points.

In Seoul, the authorities said they would boost next year's budget spending and deliver tax cuts next year to prop up Asia's fourth-largest economy. The steps follow last month's more than $130 billion in aid for the financial industry, hit by fears it may struggle to roll over its substantial short-term foreign debts.

Authorities around the globe have slashed interest rates, pumped public funds into banks, flooded money markets with cash and boosted state spending to prop up their flagging economies.

But several nations ran out of cash and options and turned to the International Monetary Fund and other global lenders for help. The IMF, which had around $200 billion available for loans at the end of August, has so far offered money to Iceland, Ukraine, Hungary and Belarus, but the queue is swelling, threatening to deplete the Washington-based lender's coffers.

Such a risk prompted Britain's Prime Minister Gordon Brown to call on cash-rich oil-producing Gulf states to contribute to a new IMF facility aimed at helping nations worst hit by the global turmoil.

FOOTNOTE

The global financial and economic upheaval has relegated the U.S. presidential election on November 4 to little more than a footnote status for financial markets bracing for another set of dismal economic data. Investors have factored in the victory of Democrat Barack Obama, who leads Republican John McCain in opinion polls, and look ahead to jobs data on Friday.

The numbers expected to show job losses nearing the 200,000 mark in October will underscore the daunting task the next U.S. president will face in turning around the world's biggest economy.

In Europe, an expected drop in retail sales in September is set to provide the backdrop for an expected half a point cut in the euro zone benchmark rate to 3.25 percent on Thursday and the Bank of England is widely seen delivering a similar cut.

Euro zone, U.S. and global surveys due later on Monday are also expected to show that the global manufacturing sector contracted last month.

The action-packed week will set the stage for a meeting of finance chiefs from 20 key world economies in Brazil, which is due to prepare a November 15 summit of world leaders on ways out of the financial crisis.

(Reporting by Reuters bureaus worldwide; Editing by Jean Yoon)