World stocks rise US budget hits bonds

News that the U.S. budget deficit for 2009 could blow out to $1.75 trillion sent U.S. Treasuries lower on Thursday, while fresh steps taken by the British government to shore up the ailing banking sector underpinned European stocks.

U.S. stock futures also rose, pointing to a firmer start on Wall Street. General Motors (GM.N), however, reported a deeper-than-expected quarterly loss, underscoring the grim outlook for the auto industry.

The pan-European FTSEurofirst 300 index .FTEU3 of top shares climbed 1.4 percent, while MSCI's main world stock index .MIWD00000PUS advanced 0.4 percent.

U.S. President Barack Obama was set to lay out the record deficit spending later in the day in a budget proposal which sets goals of overhauling the healthcare system and boosting the U.S. economy.

The huge deficit would represent 12.3 percent of U.S. gross domestic product -- the largest share since World War Two. The budget still requires congressional approval to take effect.

http://www.reuters.com/article/hotStocksNews/idUSTRE51P0OU20090226

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World stocks rise US budget hits bonds