San Francisco Frontiers - European stocks firm after sell-off on Middle East turmoil

The gains followed steep losses across Asian stock markets, where rising oil prices rattled investors on the fifth day of attacks on Iran and its retaliation across the region.

The London, Paris and Frankfurt stock markets were in the green in midday deals as European gas prices eased from this week's spike.

"Signs of a tentative stabilisation in Europe... are welcome but could be premature," said Neil Wilson, UK investor strategist at Saxo Markets.

"There may be more to come in terms of a structural decline in equity valuations should the economic effects start to be felt through trade, energy, inflation channels," he added.

Oil prices climbed, though gains were capped following US President Donald Trump's announcement that the US Navy was ready to escort oil tankers through the crucial Strait of Hormuz.

Iran's Revolutionary Guards, meanwhile, claimed "complete control" of the vital waterway, through which about a fifth of global oil supplies flow.

Fears of sustained supply disruptions have dimmed hopes for further interest rate cuts, with analysts saying central banks may delay easing if energy costs keep inflation elevated.

"Until there is a pause in this conflict and free flowing oil around the world, it is hard to see how markets can stage a meaningful recovery," said Kathleen Brooks, research director at trading group XTB.

The Dubai and Abu Dhabi stock exchanges dropped on Wednesday after a two-day trading suspension over Iran's missile and drone attacks across the Gulf.

The Dubai bourse was down more than four percent and the Abu Dhabi's ADX was more than two percent lower.

Seoul led losses in Asia as the Kospi tanked more than 12 percent, suffering its worst two-day collapse since the 2008 financial crisis, with trading briefly halted.

Chung Hae-chang, analyst at Daishin Securities, said: "Because South Korea, Japan, China and Taiwan rely heavily on energy shipments that pass through the Strait, any blockage would have significant negative effects on the market."

Japan's Nikkei 225 ended off more than three percent, with chipmakers Advantest and Tokyo Electron losing more than four percent.

Elsewhere in Asia, Taipei sank more than four percent. Bangkok tumbled eight percent to also spark a brief trading halt.

Hong Kong, Sydney, Singapore, Shanghai, Wellington, Mumbai, Manila and Jakarta were also deep in negative territory.

- Key figures at around 1140 GMT -

London - FTSE 100: UP 0.6 percent at 10,542.64 points

Paris - CAC 40: UP 1.0 percent at 8,184.20

Frankfurt - DAX: UP 1.5 percent at 24,151.68

Seoul - Kospi: DOWN 12.1 percent at 5,093.54 (close)

Tokyo - Nikkei 225: DOWN 3.6 percent at 54,245.54 (close)

Hong Kong - Hang Seng Index: DOWN 2.0 percent at 25,249.48 (close)

Shanghai - Composite: DOWN 1.0 percent at 4,082.47 (close)

New York - Dow: DOWN 0.8 percent at 48,501.27 (close)

Euro/dollar: UP at $1.1637 from $1.1617 on Tuesday

Pound/dollar: UP at $1.3382 from $1.3358

Dollar/yen: DOWN at 157.20 yen from 157.59 yen

Euro/pound: DOWN at 86.97 pence from 86.98 pence

West Texas Intermediate: UP 0.2 percent at $74.70 per barrel

Brent North Sea Crude: UP 1.1 percent at $82.31 per barrel

B.Johnson--SFF