Stocks sag, dollar firms as US-Iran talks hit stalemate

By Amanda Cooper

LONDON, May 11 (Reuters) - Stocks dipped, portion the dollar edged up connected Monday arsenic investors fretted that talks betwixt the U.S. and Iran were astatine a stalemate, leaving the captious Strait of Hormuz virtually closed, which sent lipid ‌prices up again.

President Donald Trump connected Sunday rejected Iran's effect to a U.S. connection for bid talks to extremity the ‌war, saying Tehran's demands were "totally unacceptable".

Brent crude futures, which are astir 45% higher than earlier the U.S. and Israel began strikes connected Iran connected February 28, jumped arsenic overmuch arsenic ​4.6% overnight and were past astatine $103.75 a barrel, up 2.4% connected the day.

The MSCI All-World scale was comparatively flat, portion successful Europe, the STOXX 600 eased 0.2% and U.S. banal futures traded 0.1% lower.

The correlation betwixt lipid prices and banal markets has turned affirmative successful the past 2 weeks, meaning the 2 are much apt to determination successful tandem than successful other directions, which had been the dynamic for astir of the warfare truthful far.

Investors ‌are looking beyond vigor prices for now, fixed ⁠still-strong enthusiasm for thing tech-related, arsenic good arsenic macro information - including past week's U.S. payrolls study - showing the planetary system is holding up.

"Markets are precise bully astatine assimilating this and learning to unrecorded with things that we ⁠thought were impossible. And that's wherever we are with crude close now. But if it goes up different 50%, past that volition beryllium different trial that we person to navigate," IG main marketplace strategist Chris Beauchamp said.

"If you're looking astatine the net data, it's truly good. And were it not for the ​Iran ​situation, we would beryllium truly firing connected each cylinders, adjacent much truthful than ​we are. But radical are contented to judge that, somehow, ‌there has to beryllium immoderate benignant of woody with Iran, nevertheless ugly," helium said.

An Iranian program sent to the U.S. stressed the request for an extremity to the warfare connected each fronts and the lifting of sanctions connected Tehran, on with reparations and a designation of Iran's power of the Strait of Hormuz, Iranian media reported.

"The struggle successful the Middle East is present entering its 11th week," said Bruce Kasman, planetary caput of economics astatine JPMorgan. "Energy prices person surged but stay astatine levels that are headwinds alternatively than expansion-ending obstacles."

"The hazard of a sharper determination ‌rises with each week that the Strait of Hormuz stays closed, and our commodities ​team sees operational accent levels starting sometime successful June."

Iran has efficaciously unopen the strait, ​choking disconnected a corridor that usually handles astir a 5th ​of the world's lipid and state shipments.