Portugal Colonial - Oil rises, stocks diverge on US-Iran deadlock

European stocks traded cautiously, with London edging higher while Paris and Frankfurt fell.

That came after a mixed session in Asia, where Tokyo declined and Chinese indices advanced.

The stalemate between the US and Iran dashed investors' hopes of an imminent peace deal and heightened concerns over further violence and disruptions to oil supplies through the Strait of Hormuz.

Trump described Tehran's response to the latest US outline for peace talks as "TOTALLY UNACCEPTABLE" in a brief social media post.

Iran said it had demanded the release of its frozen assets and the end of a US blockade of its ports.

Oil prices spiked more than four percent following the exchange, before easing slightly during midday trading in London.

"The price of oil remains highly reactive to news around the reopening of the Strait of Hormuz, both positive and negative," said Kathleen Brooks, research director at trading group XTB.

"Signs that tankers are getting through the Strait, even if it is a trickle, could weigh on the oil price in the coming days," she added.

In Asia, Tokyo fell, Hong Kong was little changed and Shanghai jumped more than one percent.

Seoul climbed around four percent, supported by a rally in tech stocks.

A tech-led surge driven by strong quarterly earnings and optimism about artificial intelligence has pushed several markets to record highs despite the Mideast crisis.

In Tokyo, Nintendo shares plunged almost 10 percent after the Japanese gaming giant warned Friday of lower profits this year and said it would hike the price of its Switch 2 console.

Investors this week will also be closely watching a high-stakes summit between Trump and Chinese President Xi Jinping.

Beijing said it was ready to work with the US in pursuit of "more stability" as the two countries remain at odds over key issues ranging from trade tariffs to the Middle East war and Taiwan.

UK government bond yields rose only slightly after Prime Minister Keir Starmer vowed to prove his "doubters" wrong in a speech Monday, seeking to quell the growing threat to his leadership following disastrous local election results.

"The relatively mild reaction in the bond market... suggests that traders do not believe that the threat to Keir Starmer will materialise," Brooks said.

- Key figures at around 1115 GMT -

Brent North Sea Crude: UP 2.6 percent at $103.93 a barrel

West Texas Intermediate: UP 2.7 percent at $97.97 a barrel

London - FTSE 100: UP 0.1 percent at 10,240.37 points

Paris - CAC 40: DOWN 1.0 percent at 8,033.21

Frankfurt - DAX 30: DOWN 0.1 percent at 24,307.96

Tokyo - Nikkei 225: DOWN 0.5 percent at 62,417.88 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 26,406.84 (close)

Shanghai - Composite: UP 1.1 percent at 4,225.02 (close)

New York - DOW: FLAT at 49,609.16 (close)

Euro/dollar: DOWN at $1.1772 from $1.1779 on Friday

Pound/dollar: DOWN at $1.3609 from $1.3625

Dollar/yen: UP at 157.09 from 156.76 yen

Euro/pound: UP at 86.49 pence from 86.45 pence

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A.Seabra--PC