European shares were supported on Tuesday by gains in heavyweight Royal Dutch Shell after the oil major cancelled an austerity dividend, while Ocado rallied following a deal with French supermarket Casino.

Ocado shares rose 26 per cent after Casino signed a deal with the British online retailer to use its grocery e-commerce platform to develop its online business.

Shell rose 1.8 per cent, helping send the pan-European STOXX 600 index up 0.2 per cent by 0814 GMT and sending the oil and gas index, up 0.5 per cent, the biggest sectoral gainer in Europe.

Shell cancelled an austerity dividend policy as the oil and gas company boosted its cash generation forecasts, drawing a line under three years of oil price turmoil.

UK’s FTSE 350 bank index rose 0.2 per cent in relief after a Bank of England stress test delivered no negative surprises, while Britain’s FTSE index added 0.2 per cent.

Top STOXX 600 fallers were Dixons, which fell after Siftel downgraded the stock to hold, and CHR Hansen following the resignation of its CEO. Both stocks declined more than 3 per cent.