By Christopher Whittall 

Financial markets showed signs of stabilizing Tuesday following sharp falls in the British pound and global stocks after the U.K. voted to leave the European Union last week.

The moves came as U.K. Prime Minister David Cameron traveled to Brussels Tuesday to discuss the so-called Brexit with EU leaders.

The pound rose 0.8% against the dollar to $1.332, though remained near a three-decade low reached Monday after a dramatic post-Brexit selloff. The Stoxx Europe 600 rose 2.4%, having tumbled nearly 11% over the previous two trading sessions. Financial stocks led the gains after two days of steep losses.

Futures markets pointed to a 1.2% opening gain for the S&P 500. Changes in futures aren't necessarily reflected in market moves after of the opening bell.

Demand for haven assets eased, meanwhile, with gold prices falling and U.S. Treasurys slipping slightly.

Investors continue to digest the ramifications of Britain's unexpected referendum result for the global economy and European politics. A wave of selling following Thursday's vote wiped out $3 trillion from global stock markets in two days.

Mark Dowding, a senior portfolio manager at BlueBay Asset Management, said global markets are likely to stabilize following the recent declines, noting the impact of Brexit won't be felt as keenly in Europe and the U.S. as in the U.K.

"I'd be inclined to think we have seen most of the worst of it in the course of the last couple of days in terms of global assets, but we may not have seen the worst of it in terms of the U.K.," he said.

Mr. Dowding cautioned against reading too much into Tuesday's bounce in sterling, though, warning that the pound could fall as low as $1.20 against the dollar following Thursday's vote.

"You've got an economic crisis, a constitutional crisis, a political crisis. The outlook for the pound looks depressingly bleak," he said.

Standard & Poor's Global Ratings stripped the U.K. of its triple-A credit rating Monday and Fitch Ratings cut the country's rating by a notch, predicting an "abrupt slowdown" in growth as businesses postpone investment.

"It's going to be volatile for as long as we haven't got clarity on what happens next," said Russell Silberston, a fund manager at Investec Asset Management. "The U.K. doesn't really have a government. We don't have an opposition. We don't know who's in charge. The country is split."

Asian shares mostly ended higher in choppy trade after Wall Street closed down for a second straight session, erasing three months of gains.

The Nikkei Stock Average closed up 0.1% after earlier falling as much as 1.9% earlier in the session.

In commodities, Brent crude prices rose 2.2% to $48.20 after two sessions of declines, helped by a weaker U.S. dollar.

The WSJ Dollar Index, which measures the greenback against 16 other currencies, was down around 0.5% Tuesday after rising 2.7% over the past two trading days. The euro was up 0.5% against the dollar at $1.107 recently, while the dollar gained 0.3% against the yen.

Write to Christopher Whittall at christopher.whittall@wsj.com

(END) Dow Jones Newswires

June 28, 2016 05:22 ET (09:22 GMT)

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