World stocks rose on Tuesday after three days of consecutive declines knocked them to 6-year lows, while government bonds slipped as fears grew governments may need to issue huge debt to fund economic stimulus packages.

In Europe, a mixed corporate picture allowed investors to buy back after the benchmark equity index hit a lifetime low this week.

European aerospace group EADS rose after it reported a sharp rise in 2008 operating profit. The world's second-largest utility E.ON tumbled however after it cut its profit forecast.

This will be a mixed session, a lot of people remain on the sidelines. There won't be any move on the upside until we get at least some sort of stability in the U.S. leading indicators, said Edmund Shing, strategist at BNP Paribas in Paris. MSCI world equity index <.MIWD00000PUS> rose 0.7 percent after hitting a six-year low on Monday. The FTSEurofirst 300 index <.FTEU3> erased early losses to rise 0.7 percent, having hit a lifetime low on Monday.

Tokyo stocks <.N225> fell 0.4 percent to a fresh 26-year closing low after drugmakers slid due to worries about their global competitiveness after Merck proposed to take over Schering-Plough .

Emerging stocks <.MSCIEF> rose 1.5 percent.

U.S. crude oil steadied above $47 a barrel as expectations grew OPEC might cut output at a meeting this weekend.

Euro zone government bonds cut losses and the euro trimmed earlier gains against the dollar however after European Central Bank Executive Board member Lorenzo Bini Smaghi was quoted as saying that if the economic situation worsened, the central bank was ready to cut rates further, even to zero.

The comments to the German business paper Boersen-Zeitung came after the ECB cut rates by 50 basis points to a record low of 1.5 percent last week.

The June bund futures was down 15 ticks, off an intraday low.

Japanese government bonds fell after Finance Minister Kaoru Yosano said Japan would take whatever steps necessary to keep the economy afloat, stoking worries about a possible increase in government debt issuance. June JGB futures lost 0.18 point to 138.60.

Discussions on the size the next supplementary budget have been taking place, and the market is expecting something large of the order of 20-30 trillion yen. Such a large issuance while supportive of Japanese equities will add to the glut of global bond issuance and raise concerns once more about Japan's public debt levels, UBS said in a note to clients.

The dollar <.DXY> fell 0.8 percent against a basket of major currencies.

(Additional reporting by Blaise Robinson; Editing by Victoria Main)