London (AFP) - Oil prices jumped and equities slid Thursday as hopes for a peace deal between the US and Iran wavered after Tehran rejected Washington’s bid to wind down the nearly four-week war.

Markets had been buoyed this week by US President Donald Trump’s announcement that strikes targeting Iran’s energy infrastructure would be postponed, adding that the two sides were in peace talks.

But uncertainty over the talks and the virtual closure of the Strait of Hormuz – through which around 20 percent of oil and liquefied natural gas normally passes – have cast a shadow over market sentiment.

“The market rollercoaster continues,” said Joshua Mahony, chief market analyst at Scope Markets.

Crude prices rallied more than nearly four percent on Thursday, with Brent crude above $101 per barrel and WTI around $94.

The dollar rose against its main rivals.

Wall Street opened lower, with Europe’s main markets down in afternoon trading, while there were losses across Asia.

“When the oil price surges, the market playbook stays the same: stocks and bonds sell off,” said Kathleen Brooks, research director at XTB.

The yield on government bonds rose across the board.

Conflicting messages from the US and Iran are “raising questions about whether there is really an off-ramp to the conflict in the days ahead,” said Deutsche Bank’s Jim Reid.

Washington was said to have presented a 15-point plan to end the war, while Tehran’s state-run TV reported officials had put forward their own five conditions for hostilities to end.

Trump on Wednesday threatened to “unleash hell” if Iran did not strike a deal, but Foreign Minister Abbas Araghchi said his country does not intend to negotiate with the administration in Washington.

“This is quite the shift in rhetoric from the President, and highlights how complex it will be” to reach a peace deal, said XTB’s Brooks.

She added that “the prospect of troops on the ground suggest a prolonged war and not one final blow at Iran.”

Pakistan’s Foreign Minister Ishaq Dar confirmed Thursday that indirect negotiations between the US and Iran were being held, using Islamabad as an intermediary.

“The tone taken by Iran may simply be posturing, but… there is a high likeliness they continue this conflict until energy prices reach uncomfortable levels,” Mahony said.

The OECD on Thursday cut its eurozone growth outlook and forecast higher inflation for 2026 as energy prices have skyrocketed.

The conflict has also weighed on German consumer sentiment heading into April, a survey showed Thursday, adding to the woes facing Europe’s top economy.

France, which holds the G7 Presidency, will on Monday host a meeting bringing together the group’s finance ministers, energy ministers and central bank governors.

“Pressure on energy prices, shipping flows and broader financial conditions remains one of the few meaningful sources of leverage (Iran) retains,” said Saxo Markets’ Charu Chanana.

“There is therefore little incentive to relinquish that leverage prematurely, particularly if market stress strengthens its negotiating position,” she added.

The World Trade Organization chief Ngozi Okonjo-Iweala warned the global trading system is experiencing the “worst disruptions in the past 80 years”.

- Key figures at around 1330 GMT -

Brent North Sea Crude: UP 3.9 percent at $101.09 a barrel

West Texas Intermediate: UP 3.9 percent at $93.88 a barrel

New York - Dow: DOWN 0.5 percent at 46,221.93 points

New York - S&P 500: DOWN 0.8 percent at 6,541.19

New York - Nasdaq: DOWN 1.1 percent at 21,683.53

London - FTSE 100: DOWN 1.3 percent at 9,973.41

Paris - CAC 40: DOWN 0.9 percent at 7,777.83

Frankfurt - DAX: DOWN 1.5 percent at 22,617.74

Tokyo - Nikkei 225: DOWN 0.3 percent at 53,603.65 (close)

Hong Kong - Hang Seng Index: DOWN 1.9 percent at 24,856.43 (close)

Shanghai - Composite: DOWN 1.1 percent at 3,889.08 (close)

Euro/dollar: DOWN at $1.1543 from $1.1565 on Wednesday

Pound/dollar: DOWN at $1.3349 from $1.3365

Dollar/yen: UP at 159.56 yen from 159.47 yen

Euro/pound: DOWN at 86.49 pence from 86.52 pence

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