GLOBAL MARKETS-Black Friday for China stocks but metals not so heavy

* China shares see biggest weekly drop in more than 3 months

* Euro capped as more stimulus, negative rates expected

* Onshore yuan declines as markets await IMF decision

* Industrial metals see first weekly rise since Oct (HKSE: 3366-OL.HK - news)

By Marc Jones

LONDON, Nov 27 (Reuters) - Chinese shares slumped 5 percent on Friday, hit by regulatory and industrial sector worries, though it wasn't enough to derail the first weekly rise for metals like copper and zinc since early October.

The Shanghai Composite index and the CSI300 both saw their biggest one-day drops in more than three months and ensured European stocks opened in a nervy mood.

Britain's FTSE 100 fell 0.5 percent, France's CAC40 was down 0.4 percent and Germany's DAX was 0.2 percent lower too, to leave the pan-regional FTSEurofirst 300 down 0.4 percent and clinging on for token weekly gains.

"Miners are suffering from China and a stronger U.S (Other OTC: UBGXF - news) . dollar outlook. There is clearly a risk that China will try and devalue the currency further," said Ankit Gheedia, equity and derivative strategist at BNP Paribas (Xetra: 887771 - news) .

"(However) Europe is still trading on the ECB next week, which is why the market is relatively resilient."

The intensive selling in China came amid signs its securities regulator was making fresh clampdown on leverage buying and combined with data showing a 4.6 percent drop in profits among big industrial firms.

The mining industry was the laggard with profits falling 56.3 percent in the first 10 months of the year.

The falls in Shanghai brought a 25 percent rebound rally since late August to a shuddering halt and contributed the lion's share of a 1.1 weekly drop in the broadest index of Asia-Pacific shares outside of Japan.

Japan's Nikkei reversed gains to close down 0.3 percent though it ended the week marginally highly to extend a winning streak that started in the second half of October.

The jittery China mood ensured euro zone bond yields - which move inverse to price - nudged lower again as investors also continued to position for what is expected to be another salvo of European Central Bank stimulus next month.

Investors are paying more than ever for the privilege of owning shorter-term German, French, Dutch government bonds and yields on benchmark 10-year yields are also sliding again.

"The market is anticipating the ECB to act swiftly and decisively next week," said DZ Bank strategist Christian Lenk, highlighting bets that Mario Draghi and his colleagues will continue to make it more expensive for banks to sit on cash.

"If you take the two-year Schatz (German) yield as the benchmark for the (ECB) deposit rate, the market expects a cut in the deposit rate by 20 bps to minus 0.40 percent, which we think is thinkable."

NO SO HEAVY METALS

The major currency pairs like the euro-dollar and dollar-yen were largely quiet as traders opted for caution over valour ahead of the ECB meeting and what is expected to be the first rise in U.S. interest rates in almost a decade next month.

The day's China theme was evident. The yuan was at its lowest level in almost three months as investors braced for a decision on Monday by the International Monetary Fund on whether to include the currency in its reserve basket.

Spot yuan was changing hands at 6.3942, 46 pips weaker than the previous close and about 0.04 percent away from People's Bank of China (HKSE: 3988-OL.HK - news) 's midpoint rate of 6.3915.

"It (Other OTC: ITGL - news) 's uncertain if the Chinese government is keen to show the market influence in their rate setting or whether now that they know they have gained special drawing rights inclusion they are keen to weaken their overvalued currency knowing it will not jeopardise their case," Angus Nicholson, market analyst at IG (LSE: IGG.L - news) in Melbourne, wrote in a note.

For industrial metals, which have been being battered this year by worries about China's slowing economy and oversupply, it was a day in the red.

Nevertheless the mood was still cheery as global growth attuned copper and aluminium headed for their first weekly gain since early October.

With (Other OTC: WWTH - news) the dollar hovering near a 8-1/2 month high the pressure remains on commodity prices though.

Oil prices edged lower in early European trading, though both U.S. crude futures which were at $42.45 a barrel and Brent at $45.30 a barrel were up roughly 4 percent and 1 percent respectively for the week. (Additional reporting by Alistair Smout and Dhara Ranasinghe; Editing by Toby Chopra)