LONDON — European stock markets opened higher today after Japan's Nikkei index recovered from 26-year lows, with Germany's DAX further boosted by another steep rise in the value of Volkswagen AG shares.

The FTSE 100 index of leading British shares was 92.62 points, or 2.4 percent, higher at 3,945.21, helped along by a near 6 percent rise in BP PLC's share price after the oil giant revealed an 83 percent increase in net profit in the three months from July to September to $8.05 billion.

The CAC-40 index of leading French shares was up 7.21 points, or 0.2 percent, at 3,074.56.

The biggest gainer in Europe was Germany's DAX, up 442.43 points, or 10.2 percent, at 4,777.07.

The DAX has been lifted disproportionately by another 60 percent rise in Volkswagen shares, which came on top of Monday's near 150 percent rise.

VW's gains have come after Sunday's announcement from Porsche that it had increased its stake in the company to 42.6 percent as part of its goal to take a majority stake. It also said it held an additional 31.5 percent in cash-settled options, that would give it indirect control of 74.1 percent of VW shares.

Analysts explained that Porsche's announcement has forced hedge funds to cover huge positions as they had bet on VW's shares falling, especially as the state of Lower Saxony owns just over 20 percent of VW stock. That means there's only around 5 percent of free-floating VW stock available.

Neil Mackinnon, chief economist at ECU Group, said much of the developments in VW is symptomatic of what's been going on across markets in the last few weeks.

"I think that a lot of the extreme and violent moves across asset classes has a lot to do with hedge funds deleveraging and unwinding positions," he said.