[LONDON] European shares rose for the first time in three days on Tuesday, attempting a recovery from the heavy sell-off in the previous two sessions after Britain's shock vote to leave the European Union.

The pan-European STOXX 600 index, which had slumped 11 per cent in the last two sessions.

British and European banking stocks, which had suffered the worst of the market rout of the last two days, climbed back up, with Barclays up 6.3 per cent while Deutsche Bank rose 3.5 per cent.

Volkswagen shares rose 2.9 per cent, as sources said the German carmaker was nearing a settlement valued at more than US$15 billion with nearly 500,000 US diesel owners and government regulators over polluting vehicles.

Shares in oil majors also advanced to add a further stabilising effect to the market, with oil prices climbing as a looming strike in Norway threatened to cut output in western Europe's biggest producer.

REUTERS