NEW YORK (Reuters) - The dollar slipped and global stock markets surged on Thursday as investors bet Republicans would be able to halt major policy changes under a Joe Biden presidency, while the Bank of England became the latest central bank to announce more stimulus. With both Georgia U.S. Senate seats headed for possible runoff elections in January, the state could determine whether Republicans retain a majority in the Senate. Biden drew closer to defeating Republican President Donald Trump as counting continued from Tuesday’s elections, even as the Trump campaign said it expected to launch more legal actions and would emerge victorious. Investors leapt on the prospect of gridlock in Congress and the notion Silicon Valley will be spared greater oversight if the Democrats in fact are unable to control the Senate. Tech shares in Europe jumped 2.5% .SX8P, extending a rally of just over 8% this week, while the tech-heavy Nasdaq composite index, S&P 500 and Dow industrials each rose about 2%. European stocks hit two-week highs on strong earnings results and after the BofE increased its already huge bond-buying stimulus by 150 billion pounds ($195 billion), or about 50 billion pounds more than expected. The Federal Reserve kept its loose monetary policy intact and pledged again to do whatever it can in coming months to sustain a U.S. economic recovery threatened by the spreading coronavirus pandemic. “All indications in the market seem to really be putting this whole event in the rearview mirror, which is a little surprising to me considering how tight some of this stuff is,” said Patrick Leary, chief market strategist and senior trader at Incapital in Minneapolis. Equities have surged as the size of a fiscal stimulus deal reached in a divided Congress to support the economy is likely to be much smaller than anticipated under a Biden-led blue wave. But that likely will force the Fed to pump more money into markets, which ultimately supports equities. (For the latest election results and more coverage, click: here) MSCI"s benchmark for global equity markets rose 2.15% to 591.38, while Europe"s broad FTSEurofirst 300 index .FTEU3 closed up 0.94% at 1419.84. On Wall Street, the Dow Jones Industrial Average .DJI rose 1.95% and the S&P 500 .SPX gained 1.95%. The Nasdaq Composite .IXIC added 2.59%, lifting the tech-heavy index to its highest close since early September when it peaked. Overnight in Asia, stocks .MIAPJ0000PUS rallied 2% to their highest since February 2018. Japan"s Nikkei .N225 rose 1.7% to a more than nine-month top, South Korea .KS11 gained 2.4% and Chinese blue chips .CSI300 added 1.3% on hopes a Biden White House would ease up on tariffs. The dollar fell to two-week lows against a basket of currencies and a seven-month low against the Japanese yen as the likelihood of a Democratic blue wave in the White House and Congress slowly vanished, snuffing any large U.S. stimulus package. The dollar index =USD fell 0.86%, while MSCI"s benchmark for global equity markets .MIWD00000PUS rose 2.15% to 591.38. Emerging markets stocks .MSCIEF surged 2.88%. “The market’s assuming that Biden wins the White House but that the Senate is not going to be in the Democrats’ hands, so you don’t have as big of a stimulus,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. U.S. Treasury yields edged higher after dropping from four-month highs as a large jump in near-term supply to fund stimulus became less likely, reducing the appeal of the debt and weighing on the dollar. Weak economic growth is putting a damper on the ability to offer higher interest rates for government debt, which is weighing on the dollar, Chandler said. The euro EUR= was up 0.88% to $1.1825 and the Japanese yen JPY= strengthened 0.96% versus the greenback to 103.52 per dollar. The Chinese yuan CNH= gained to a more than two-year high of 6.5994. The currency had been slammed by Sino-U.S. disputes since the outbreak of the bilateral trade war in 2018. Gold surged as the dollar slipped, with spot prices XAU= rising 2.35% to $1,947.96 an ounce. U.S. gold futures settled up 2.7% at $1,946.80. The 10-year U.S. Treasury note rose 0.2 basis points to 0.7663%. Italy’s five-year bond yields fell below zero for the first time. (Graphic: Emerging winners link: ) Oil prices dropped on growing concerns about weak demand as the economy sputters during a resurgent coronavirus pandemic. Brent crude futures settled down 30 cents at $40.93 a barrel. U.S. crude futures fell 36 cents to settle at $38.79 a barrel.