Portugal Colonial - Oil prices jump, stocks retreat on US-Iran deadlock

Iran's chief negotiator said Tuesday that Washington must accept Tehran's latest peace plan or face failure, after US President Donald Trump warned the truce in the Middle East war was on the brink of collapse.

Rising crude futures were also pushing up government bond rates, including in Britain, where political uncertainty soared as Prime Minister Keir Starmer clings to power, analysts said.

"Oil prices are rising again, and global bond markets are pricing in inflation risks," said Kathleen Brooks, research director at XTB trading group.

"The UK yields are facing a double whammy of an energy price spike and a political crisis," she added.

The yield on the country's 30-year bonds reached 5.814 percent Tuesday, the highest level since 1998.

The 10-year rate hit 5.135 percent, a peak last seen during the 2008 global financial crisis.

On oil markets, the international benchmark Brent North Sea crude shot up more than 3.5 percent, and the main US contract, West Texas Intermediate, rose nearly four percent.

Europe's main stock markets were in the red in midday deals after losses for some major Asian indices.

South Korean calls for a social tax on artificial intelligence profits largely dragged down the tech-rich Kospi index by five percent.

South Korea is riding a chip boom driving massive earnings for tech giants Samsung and SK hynix, which had sent the Kospi to record highs in recent weeks.

The dollar strengthened after US stocks held modest gains Monday as enthusiasm about artificial intelligence managed to offset concerns over high oil prices.

The Middle East war, which erupted more than two months ago with US-Israeli strikes on Iran, has spread throughout the Middle East and roiled the global economy despite a ceasefire.

The impasse leaves the vital Strait of Hormuz mostly closed to oil tanker traffic, though investors still hope a deal will be reached soon to avoid long-term disruptions to energy markets.

Traders are now looking to Beijing, where Trump lands this week to meet with President Xi Jinping, the first visit by a US president since his own in 2017.

Taiwan, tariffs, rare earths and the war in Iran are set to top the agenda, with China a major buyer of Iranian crude.

Top executives including Tesla boss Elon Musk and Apple's Tim Cook will fly in to back Trump's push to ramp up trade with Beijing.

- Key figures at around 1045 GMT -

Brent North Sea Crude: UP 3.7 percent at $108.02 a barrel

West Texas Intermediate: UP 3.9 percent at $101.82 a barrel

London - FTSE 100: DOWN 0.3 percent at 10,234.04 points

Paris - CAC 40: DOWN 0.6 percent at 8,008.96

Frankfurt - DAX 30: DOWN 1.1 percent at 24,089.24

Tokyo - Nikkei 225: UP 0.5 percent at 62,742.57 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 26,347.91 (close)

Shanghai - Composite: DOWN 0.3 percent at 4,214.49 (close)

New York - DOW: UP 0.2 percent at 49,704.47 (close)

Euro/dollar: DOWN at $1.1747 from $1.1775 on Monday

Pound/dollar: DOWN at $1.3546 from $1.3628

Dollar/yen: UP at 157.52 from 157.23 yen

Euro/pound: UP at 86.71 pence from 86.40 pence

L.Carrico--PC