By Hilary Russ
NEW YORK (Reuters) - Stocks rose worldwide for the first time in three days and the British pound and the euro climbed slightly on Tuesday as investors snapped up Brexit-bashed assets.
Bargain-hunting prevailed, but there was still widespread uncertainty over Britain's vote to leave the European Union as the bloc's leaders, including soon-to-be-ex UK Prime Minister David Cameron, held their first post-vote meeting in Brussels.
European shares <.FTEU3> were up 2.4 percent, clawing back some of their 10 percent loss the wake of the UK's vote in favour of Brexit on Friday.
Wall Street shares also bounced back, with banking shares recovering some of what they had lost. The S&P financial index <.SPSY> rose as much as 1.726 percent intraday.
The Dow Jones industrial average <.DJI> rose 167.03 points, or 0.97 percent, to 17,307.27, the S&P 500 <.SPX> gained 23.21 points, or 1.16 percent, to 2,023.75 and the Nasdaq Composite <.IXIC> added 72.79 points, or 1.58 percent, to 4,667.23.
Britain's Lloyds
Sterling also got a reprieve, last up 0.7 percent against the greenback at $1.332 >, regaining some ground after hitting a 31-year low of $1.3122 on Monday. The euro > was last up 0.2 percent against the dollar at $1.1048 after hitting a 3-1/2 month low of $1.0909 on Friday.
Against the yen, sterling rose 2.20 percent to 136.93 >.
"After a few days of a lot of volatility, it looks like we have found some stability," said TD Securities' European Head of Currency Strategy Ned Rumpeltin.
Even so, the lack of clarity over how A British exit from the EU will proceed could fuel volatility in the weeks to come.
"I think this is a short-lived rally," said Paul Nolte, portfolio manager as Kingsview Asset Management.
The major concern for investors - aside from the political ramifications of a split - is whether already struggling banks can survive if Brexit prompts central banks in Europe, Switzerland, Scandinavia and Japan to cut interest rates even more deeply into negative territory.
CHERRY-PICKING
Safe-haven assets gold and U.S. Treasuries stepped back after two heady days. Spot gold > fell 0.8 percent at $1,314.21 an ounce at 1830 GMT on Tuesday.
Oil prices regained ground, rising 3 percent, while investors refocused on potential supply outages and drawdowns in crude. A looming strike at several Norwegian oil and gas fields that threatened to cut output in western Europe's biggest producer helped support crude futures.
U.S. crude oil futures
The two benchmarks fell nearly 8 percent over the past two sessions, with Brent hitting seven-week lows under $47 and U.S. crude a one-month trough below $46.
U.S. Treasuries flattened as worries about growth countered some of the stock market relief that had lowered yields. The yield on benchmark 10-year U.S. Treasury notes > was at 1.463 percent.
Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> ended up 0.5 percent.
(Reporting by Hilary Russ in New York and Marc Jones in London; Additional reporting by Yashaswini Swamynathan in Bengaluru, Sam Forgione and Barani Krishnan in New York and Jan Harvey in London; Editing by Dan Grebler and Chizu Nomiyama)
