Portugal Colonial - Oil gains, stocks slip on uncertain Mideast peace prospects

US President Donald Trump has described the latest discussions as being on the "borderline" between a deal and renewed strikes.

Pakistan's army chief was due in Iran on Thursday, Iranian media reported, with Islamabad mediating as Tehran examines a new US proposal to end the war.

"Markets pulled back across Europe as the waiting game to end the Iran war rumbled on," said Dan Coatsworth, head of markets at AJ Bell.

Wall Street's main indices also dipped at the open.

There were earlier big gains for technology stocks in Asia after chip giant Nvidia posted record quarterly revenue of $81.6 billion, blowing past analyst forecasts on the voracious demand for artificial intelligence hardware.

Sentiment was also boosted by Elon Musk's filing for a public sale of SpaceX shares, which could be the largest initial public offering in history as the rocket and satellite company seeks to raise up to $75 billion.

"This could be a blockbuster summer for IPOs with OpenAI also expected to list in the coming weeks," said Kathleen Brooks, research director at XTB.

"How the market absorbs these new listings will be crucial for the future of the AI trade, as both companies are at the heart of the AI revolution," she said.

South Korea's benchmark Kospi index surged 8.4 percent, helped by Samsung Electronics shares after unions paused a 18-day strike.

Japan's Nikkei index ended with a gain of 3.1 percent.

But despite the group's profit growth, Nvidia shares failed to get a boost as they have in previous quarters, gaining 0.2 percent after trading got underway in New York.

With tech shares, whose staggering rises helped drive markets to record highs in recent months, now considered by many investors to be overvalued, investment analyst Bret Kenwell at eToro said there were worries that a pullback was in store.

"While geopolitical risks could still flare up, the more pressing issue appears to be macro-related," he said, pointing to the recent rise in sovereign bond yields and the prospect of central banks raising interest rates.

The yields demanded by investors to lend to governments by buying their bonds have peaked in recent days, indicating weakening confidence in their economies and inflation fears.

After tech gains in Asia, attention turned to US-Iran war developments and the potential fallout for economies on the continent, sending European stocks lower.

The EU warned Thursday that eurozone growth would be less than expected this year and inflation significantly higher than forecast, as the Mideast war and subsequent energy shock take their toll.

It came as a key survey revealed that business activity in the eurozone contracted further in May, weighed down by weak demand caused by a conflict.

British private-sector activity also unexpectedly contracted this month, marking the first decline in output in over a year, S&P Global added.

"The UK economy is facing a perfect storm, as rising political uncertainty adds to the growing impact from the war in the Middle East," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

In other corporate news, French video game giant Ubisoft saw its shares plunge around 11 percent after it reported disappointing annual results and forecast further pain in the coming year.

The "Assassin's Creed" and "Rayman" developer had warned in January of the likely impact, with seven games cancelled and six delayed.

- Key figures at around 1330 GMT -

Brent North Sea Crude: UP 3.7 percent at $108.55 a barrel

West Texas Intermediate: UP 3.9 percent at $102.04 a barrel

New York - DOW: DOWN 0.5 percent at 49,767.30 points

New York - S&P 500: DOWN 0.4 percent at 7,400.45

New York - Nasdaq Composite: DOWN 0.4 percent at 26,172.50

London - FTSE 100: DOWN 0.4 percent at 10,393.62

Paris - CAC 40: DOWN 0.6 percent at 8,066.59

Frankfurt - DAX 30: DOWN 0.8 percent at 24,545.19

Tokyo - Nikkei 225: UP 3.1 percent at 61,684.14 (close)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 25,386.52 (close)

Shanghai - Composite: DOWN 2.0 percent at 4,077.28 (close)

Euro/dollar: DOWN at $1.1586 from $1.1629

Pound/dollar: DOWN at $1.3403 from $1.3442 on Wednesday

Dollar/yen: UP at 159.25 yen from 158.89

Euro/pound: DOWN at 86.46 pence from 86.53 pence

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