GLOBAL MARKETS-European stocks eye weekly drop, Bitcoin slides on U.S. tax hike plan

* European stocks down 0.4%, S&P futures up 0.25%

* Bitcoin down 4.5%, Ethereum down 6.5%

* Euro eyes 7-week high vs dollar, euro zone PMI upbeat

* U.S. April PMI data due at 1345 GMT

By Carolyn Cohn

LONDON, April 23 (Reuters) - European stocks were on track for their first weekly loss in eight and Bitcoin hit its lowest in nearly seven weeks on Friday as investors assessed the impact of a possible U.S. capital gains tax hike.

President Joe Biden will roll out a plan to raise taxes on the wealthiest Americans, including the largest-ever increase in levies on investment gains, to fund about $1 trillion in childcare, universal pre-kindergarten education and paid leave for workers, sources familiar with the proposal said.

Biden's administration is seeking an increase in the capital gains tax to near 40% for wealthy individuals, almost double the current rate, the sources said.

"The devil is always going to be in the detail," said Ned Rumpeltin, European head of currency strategy at TD Securities, adding that the Democrats' narrow majority could make the proposals hard to pass.

The pan-European STOXX 600 dropped 0.4% and was on course for a 1% weekly drop, with a surge in global coronavirus cases also weighing. https://tmsnrt.rs/2FkV6wq

S&P futures gained 0.25%, however, after the Dow Jones Industrial Average ended down nearly 1% on the tax proposal.

Bitcoin dropped below the $50,000 level to its lowest level in nearly seven weeks, before recovering some ground to trade at $49,350, down 4.5%. Ethereum was down 6.5% at $2,250.

World stocks were flat on the day and down 0.9% on the week after hitting record highs close to 3,000 on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.65%, however, with Chinese blue-chip shares up 0.91%, supported by green and healthcare stocks. Japan's Nikkei stock index slid 0.57%.

"I don't think people are completely negative on the fact that those (U.S.) tax changes are being flagged," said James McGlew, executive director of corporate stockbroking at Argonaut.

"Ultimately it's money that will feed back into the economy."

EUROPEAN GROWTH

The euro zone economy will grow more slowly this year than earlier thought and a temporary gain in inflation is likely to exceed a previous projection, a European Central Bank survey showed on Friday, a day after the bank left policy unchanged.

However, IHS Markit's flash Composite Purchasing Managers' Index for the euro zone, seen as a good guide to economic health, rose to a nine-month high of 53.7 in April, confounding expectations in a Reuters poll for a dip to 52.8. Anything above 50 indicates growth.

The United States numbers are due at 1345 GMT.

"The euro zone has enjoyed a record manufacturing boom this month as the continent sees its early stages of the recovery efforts reaping rewards," said Mihir Kapadia, CEO of Sun Global Investments, in a client note.

"We could expect some hiccups along the way, but sentiment should remain higher for some time.”

The euro rose 0.3% on the day to $1.2052 after dipping a day earlier, within sight of a seven-week high hit earlier this week.

The dollar was steady against the yen at 107.92 and the dollar index, which tracks it against a basket of currencies of other major trading partners, fell 0.26%.

The yield on benchmark 10-year Treasury notes was steady at 1.5489% after the capital gains tax reports pulled yields lower on Thursday. Germany's 10-year government bond yield, the benchmark of the euro area, was also flat.

Oil prices were steady, with support from the European economic recovery countered by persisting coronavirus concerns as infections surged to record levels in India.

U.S. crude edged up 0.1% to $61.50 a barrel and global benchmark Brent crude was flat at $65.35 per barrel.

Spot gold was little changed at $1,785 per ounce but was still set for a weekly rise on soft Treasury yields and a subdued dollar.

(Additional reporting by Andrew Galbraith in Shanghai and Simon Jessop in London; editing by Richard Pullin, Jacqueline Wong and Louise Heavens)