LONDON - Global stock markets clawed back losses Monday as spiralling tensions over North Korea showed tentative signs of easing, in turn reducing appetite for haven assets.

Fears of a catastrophic confrontation between Washington and Pyongyang were calmed when CIA director Mike Pompeo said Sunday there was "nothing imminent" in the escalating stand-off.

London's benchmark FTSE 100 index climbed 0.6 percent, while in the eurozone Paris and Frankfurt rose one percent or more.

"European equity markets appear to have left the fears of late last week behind, with investors coming out of their defensive positions to move back into riskier assets," said Joshua Mahony, market analyst at traders IG.

In New York, the Dow index was up 0.6 shortly after the opening bell.

Earlier in Asia, Hong Kong was back in positive territory Monday after slumping two percent Friday, while Shanghai ended the day higher despite data showing Chinese industrial production slowed sharply in July as government efforts to rein in debt weighed on demand.

However, Tokyo closed one percent down as traders returned from a three-day holiday weekend to play catch-up after Asian and European shares had dropped Friday, with the Nikkei finishing at its lowest level in more than three months.

Investors largely shrugged off official data showing Japan's economy grew by a faster-than-expected one percent in the three months to June, as the accelerating world number three economy marked its longest economic expansion in more than a decade.

- 'Not out of the woods' -

"What we are seeing today is relief at the (geopolitical) situation not deteriorating over the weekend, something traders were clearly wary of towards the end of last week," said Oanda analyst Craig Erlam.

As stock markets started recovering, the dollar rose against the Japanese currency and the euro, while gold halted its advance after jumping 2.4 percent last week.

"We're seeing a small unwinding of ... risk aversion trades, with gold trading slightly lower and the yen and Swiss franc off against the dollar, pound and euro," Erlam added.

Last week's losses worldwide were triggered by President Donald Trump threatening to unleash "fire and fury" on North Korea, and Pyongyang countered by announcing plans to test-launch missiles toward Guam.

"There is a still a 'buy the dips' mentality running through financial markets," said Chris Weston, chief market strategist at IG Markets.

However, analysts cautioned that with joint South Korean-US military exercises scheduled and North Korea celebrating "Liberation Day" Tuesday, volatility could return to markets.

"We are not out of the woods yet and the situation in North Korea will remain front and centre," said Weston.