* Abe victory lifts Nikkei, world stocks, dollar
* Sentiment helped by optimism about U.S. tax cuts
* European shares slightly up, Spanish crisis weighs
* Euro eases on dollar strength
* Dow Jones, Nasdaq, S&P futures up slightly
LONDON, Oct 23 (Reuters) - Japanese Prime Minister Shinzo Abe's election victory lifted world stocks and the dollar on Monday, relegating concerns about Spain's escalating political crisis to little more than a blip on the market radar.
Abe's emphatic win, which heralds a continuation of Japan's hyper-easy monetary policy, kept risk-on bets in play after fresh optimism about tax cuts in the United States had pushed Wall Street to a new record on Friday.
President Donald Trump also indicated that the re-appointment of Federal Reserve Chair Janet Yellen was still a possibility.
The dollar rose 0.4 percent to 113.91 yen on Monday, its highest since July, and edged up 0.3 percent against a basket of currencies. The euro fell 0.4 percent to $1.1742.
"It seems most likely to me that dollar strength is now dominating in euro-dollar," said Esther Reichelt, foreign exchange strategist at Commerzbank, also pointing to the imminent Fed chair decision.
European shares STOXX 600 rose 0.3 percent, although banks weighed and Madrid's bourse IBEX lagged its peers, shedding 0.3 percent, as Spain's crisis dragged on.
Madrid took the unprecedented step of firing the government of Catalonia on Saturday in a last resort to thwart its push for independence and to calm fears of unrest and economic turmoil.
Britain's main share index started the week with a 0.1 percent gain, led by hopes of a breakup of engineering group GKN as further profit warnings, which have multiplied in the UK in recent weeks, kept gains in check.
Dow Jones and S&P 500 futures were up about 0.1 percent, while Nasdaq futures were up about 0.2 percent.
Japan's Nikkei climbed 1.1 percent to its highest since 1996, lifting the MSCI All-Country World index to a fresh record high.
Also trading on Abe's big win, euro zone borrowing costs fell, as bond markets ready for the European Central Bank to signal baby steps away from its ultra-easy policy stance on Thursday and for the U.S. Federal Reserve to hike rates in December.
German Bund futures were up 0.1 percent.
"Now there's a renewed mandate for quantitative easing, which means a weaker yen and stronger Japanese government bond prices. It also has a significant spillover for other developed markets," said Peter Chatwell, head of euro rates strategy at Mizuho.
Britain's pound edged lower against the dollar as worries over divisions within the ruling Conservative party as well as uncertainty over the Bank of England's interest rate outlook left the currency on unsteady ground.
Growth in British factory orders slowed this month to its weakest in almost a year, a survey from the Confederation of British Industry showed.
The stronger dollar also increased pressure on some emerging currencies, with the Turkish lira and stocks suffering amid lingering concerns over Ankara's relationship with Washington.
Gold hit its lowest in more than two weeks.
China stocks ended slightly higher on strong gains in consumer and healthcare firms although trading volumes remained thin as investors awaited policy cues from a party congress and data showed growth in new home prices slowed to a crawl in September.
London copper traded up 0.4 percent after Chinese authorities reaffirmed that the country's economy was on track to achieve the official growth target.
The MSCI Emerging Market index was down 0.1 percent.
Oil prices largely held onto last week's gains, supported by supply disruptions in Iraq and a drop in U.S. drilling.
Brent crude fell 11 cents to $57.63 a barrel, while U.S. crude futures added 5 cents to $51.89. ($1 = 0.8508 euros)
(Additional reporting by Wayne Cole, Dhara Ranasinghe, Helen Reid and Polina Ivanova; editing by John Stonestreet)