LONDON, Aug 15 (Reuters) - European shares rose in early deals on Tuesday, recovering further ground as geopolitical tensions eased in holiday-thinned trading.
The pan-European STOXX 600 index was up 0.3 percent, while blue chips gained 0.5 percent.
Britain's FTSE 100 rose 0.2 percent, and Germany's DAX ticked 0.5 percent higher. Italian and Austrian markets were closed for a holiday.
Financials extended their gains from the previous session and were the biggest contributors to gains, having been hit particularly hard in the latter part of last week as tensions rose between the U.S. and North Korea.
Danone led the food and beverage index higher, up 2.6 percent after a media report that the activist fund Corvex Management owned a stake in the French yoghurt maker.
Elsewhere, the German potash miner K+S dropped 3 percent close to a four-month low after saying that it was unlikely to reach its 2020 earnings EBITDA target, blaming a slow recovery of potash prices.
Retailer Next's shares fell 2.9 percent after Berenberg cut its rating on the stock to "sell" from "hold".
Earnings also spurred some moves, with fund supermarket Hargreaves Lansdown falling 1.3 percent after reporting its full-year results.
The European second-quarter earnings season is rolling to a close with 82 percent of MSCI Europe firms having already reported earnings, according to Thomson Reuters data.
More than 60 percent have either met or beaten analysts expectations.
(Reporting by Kit Rees; Editing by Kevin Liffey)