Portugal Colonial - European stocks extend gains, oil falls on US-Iran deal

London, Paris and Frankfurt stock markets all climbed around 0.5 percent in midday deals, after a mixed session in Asia.

"Although the deal has not been formally signed, there already appears to be a peace dividend for markets," said Kathleen Brooks, research director at trading group XTB.

"We are seeing European markets play catch-up with the US, and this could continue, as some European indices remain below their pre-war levels," including London's FTSE 100 index, she added.

US President Donald Trump said ships were moving through the Strait of Hormuz and the key route would be "completely open" by Friday, while Iranian media reported that three oil tankers and two cargo ships had already passed through.

Tehran blockaded the strait after the US and Israel launched their war against Iran on February 28, prompting Washington to halt shipping to and from Iranian ports.

World oil prices fell more than two percent Tuesday after Monday's sharp drop, leaving international benchmark Brent North Sea crude trading at around $81 a barrel.

But analysts warned that market conditions could remain tight for weeks or months.

US Energy Department data meanwhile showed that strategic oil stockpiles sank last week to their lowest level since 1983 -- indicating sustained demand to rebuild them even if the Mideast conflict ends.

"Oil prices, for now, are hovering at the lowest level in two months... but it's still trading at a premium compared to pre-conflict levels, demonstrating the ongoing uncertainties about supplies," said Susannah Streeter, chief investment strategist at Wealth Club.

Focus this week is also on a wave of central bank decisions.

The Federal Reserve on Wednesday is set to leave interest rates unchanged, despite inflation at a three-year high. The Bank of England is also expected to stand pat.

The yen was little changed after the Bank of Japan on Tuesday raised interest rates to their highest level since 1995.

In Asian stocks trading, Seoul led gains, surging two percent thanks to continued strength in the technology sector.

Tech stocks received a boost from another blockbuster performance by Elon Musk's SpaceX, which jumped almost 20 percent for a second session in a row after listing at the end of last week.

Tokyo's Nikkei 225 index also advanced, briefly topping 70,000 points for the first time, while Hong Kong and Shanghai fell.

- Key figures around 1100 GMT -

Brent North Sea Crude: DOWN 2.5 percent at $81.08 a barrel

West Texas Intermediate: DOWN 2.8 percent at $78.46 a barrel

London - FTSE 100: UP 0.6 percent at 10,491.47 points

Paris - CAC 40: UP 0.7 percent at 8,444.50

Frankfurt - DAX: UP 0.6 percent at 25,035.07

Tokyo - Nikkei 225: UP 0.1 percent at 69,404.50 (close)

Hong Kong - Hang Seng Index: DOWN 1.4 percent at 24,493.95 (close)

Shanghai - Composite: DOWN 0.1 percent at 4,091.89 (close)

Seoul - Kospi: UP 2.1 percent at 8,726.60 (close)

New York - Dow: UP 0.9 percent at 51,671.03 (close)

Euro/dollar: UP at $1.1609 from $1.1592 on Monday

Pound/dollar: UP at $1.3424 from $1.3416

Dollar/yen: UP at 160.32 yen from 160.30 yen

Euro/pound: UP at 86.49 pence from 86.40 pence

P.Queiroz--PC