London (AFP) - Stock markets advanced cautiously Thursday on expectations that a Mideast ceasefire would soon let oil and gas tankers resume transit through the Strait of Hormuz, easing inflation pressures that have upended economies worldwide.

Signs of fresh talks aimed at ending the war launched by the United States and Israel against Iran have pushed stock indexes to all-time highs, suggesting investors expect a quick economic rebound from the conflict.

European stocks ended largely just in the green, with London and Frankfurt adding a little shy of 0.5 percent on the day while Paris slipped slightly.

Two hours into Wall Street trading, the Dow Jones was up just 0.1 percent at 48,499.95 points, with the broader-based S&P 500 adding 0.2 percent, though the tech-heavy Nasdaq was off 0.1 percent.

The Tokyo stock market earlier reached a record high, following all-time peaks for key US indexes on Wednesday as investors cheered healthy earnings for American blue chips despite surging oil prices and rising inflation overall.

Global stock markets “have staged one of the fastest recoveries in recent memory”, said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

At the same time, “oil prices remain elevated… as investors look towards a possible extension of the ceasefire between the US and Iran while weighing the chances of a broader agreement that could ultimately reopen the Strait of Hormuz”, he said.

Around 1550 GMT, main benchmark Brent North Sea Crude had risen 3.1 percent to $97.90, while West Texas Intermediate was up 2.2 percent at $93.26 a barrel.

The Strait of Hormuz, through which around one-fifth of oil and gas usually passes, has been choked by Iranian forces since the US-Israeli offensive began on February 28.

In the eurozone, inflation leapt to 2.6 percent in March on surging energy prices, official data showed.

Yet even as the global economy reels from the fallout of war in the Middle East, China’s economic growth topped expectations in the first quarter of the year, official figures showed.

Gross domestic product in the world’s second-largest economy expanded 5.0 percent in the quarter from a year earlier.

“Hope has given way to a bright, beaming light at the end of the peace tunnel,” said Stephen Innes at SPI Asset Management.

“The market is no longer asking whether there will be a deal. It is trading as if the deal is already signed, sealed, and quietly filed away.”

- Key figures around 1545 GMT -

New York - Dow Jones: UP 0.1 percent at 48,499.95 points

New York - S&P 500: UP 0.2 percent at 7,037.72

New York - Nasdaq: DOWN 0.1 percent at 23,999.38

London - FTSE 100: UP 0.3 percent at 10,589.99 (close)

Paris - CAC 40: DOWN 0.1 percent at 8,262.70 (close)

Frankfurt - DAX: UP 0.4 percent at 24,154.47 (close)

Tokyo - Nikkei 225: UP 2.4 percent at 59,518.34 (close)

Hong Kong - Hang Seng Index: UP 1.7 percent at 26,394.26 (close)

Shanghai - Composite: UP 0.7 percent at 4,055.55 (close)

Brent North Sea Crude: UP 3.1 percent at $97.90 a barrel

West Texas Intermediate: UP 2.2 percent at $93.26 a barrel

Euro/dollar: DOWN at $1.1780 from $1.1801 on Wednesday

Pound/dollar: DOWN at $1.3536 from $1.3570

Dollar/yen: UP at 159.12 yen from 158.97 yen

Euro/pound: UP at 87.03 pence from 86.95 pence

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