LONDON (AP) - World markets rallied yesterday as investors grew increasingly confident that Ireland will receive a rescue package and General Motors Corp. made a big splash on its return to market less than a year and a half after it went bankrupt.

In Europe, the FTSE 100 index of leading British shares was up 74.13 points, or 1.3 percent, at 5,766.69 while Germany's DAX rose 127.24 points, or 1.9 percent, at 6,827.31. The CAC-40 in France was 58.27 points, or 1.5 percent, higher at 3,850.62.

By mid-afternoon London time, the euro was up 0.6 percent at $1.36. On Wednesday, it had fallen to a seven-week low of $1.3460 as uncertainty over Ireland lingered.

Greece, which has already been bailed out, unveiled more spending cuts to get its budget deficit down to 7.4 percent of gross domestic product in 2011 from this year's projected 9.4 percent - a cut of €5 billion.

The latest austerity budget includes spending cuts at loss-making state-run enterprises, healthcare and defense as well as tax hikes.

Even though the government is expected to get the next tranche of money from its €110 billion bailout facility, the outlook for the country's economy remains grim.

"With the economy is likely to remain in recession well beyond 2012, we think that the debt to GDP ratio could eventually exceed 170 percent of GDP, implying that a restructuring of government debt is eventually all but inevitable," said Ben May, European economist at Capital Economics.

Earlier in Asia, stocks advanced, particularly in Japan as exporters benefited from the weaker yen - by mid afternoon London time, the dollar was up 0.4 percent at 83.53 yen.

The Nikkei 225 stock average jumped 2.1 percent to close at 10,013.63 while Hong Kong's Hang Seng index closed up 1.8 percent at 23,637.39.

In China, the benchmark Shanghai Composite Index gained 0.9 percent to 2,865.45 while the Shenzhen Composite Index for China's second, smaller exchange jumped 1.8 percent to 1,260.59.

Benchmark oil for December delivery was up $1.26 to $81.70 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.90 to settle at $80.44 on Wednesday.