* Stocks continue to slide as Trump fails to calm markets

* US president extended key deadline but oil prices rise

again

* US Treasury yields hit highest since July as bonds fall

(Updates throughout for European session)

By Harry Robertson and Stella Qiu

LONDON/SYDNEY, March 27 (Reuters) - Global stock markets

fell again on Friday after U.S. President Donald Trump's

extension of a deadline for Iran to reopen the Strait of Hormuz

failed to calm oil prices or government bonds.

Trump's postponement of the deadline, after which he has

said Iran will face attacks on its energy infrastructure, came

just after Wall Street stocks closed out their biggest one-day

fall since the war began on Thursday.

Markets appeared sceptical about the chances of a deal

between the two sides being struck, however, with oil prices

rising once again on Friday and government bonds sliding.

The pan-European STOXX 600 index dropped 0.7% in

early trading after sliding 1.1% on Thursday.

MSCI's index of Asian shares excluding Japan fell 0.6%

overnight.

MARKETS SHRUG OFF TRUMP DELAY

Futures for the U.S. S&P 500 gave up earlier gains

and were last flat, after tumbling 1.7% in the previous session.

The tech-focused Nasdaq Composite dropped 2.4% on

Thursday, leaving the index down nearly 11% from its record-high

close in late October. Nasdaq futures were also flat.

A Wall Street Journal report that Trump was considering

sending more troops added to concern about the war escalating

into a ground conflict, with no certainty that the Strait of

Hormuz - through which 20% of global energy typically flows -

will be reopened to shipping soon.

An Iranian official dismissed a U.S. proposal to end the

conflict as "one-sided and unfair" on Thursday.

"Words alone aren't cutting it right now, with President

Trump's extension of the pause on Iran energy strikes failing to

lift the mood in any meaningful way," said Matt Britzman, senior

equity analyst, Hargreaves Lansdown.

"Tangible evidence of progress is what's needed."

Brent crude oil, the global benchmark, rose around

2% to $110 a barrel.

GLOBAL BOND YIELDS SURGE

Government bond yields rose after jumping on Thursday as

investors grappled with a potential inflationary shock that

could force central banks to raise interest rates. Yields rise

as prices fall and vice versa.

The 10-year U.S. Treasury yield, which sets the

tone for borrowing costs around the world, rose 4 basis points

to 4.456%, its highest level since July.

Money markets now see a roughly 70% chance the U.S. Federal

Reserve raises rates this year, a sharp change from late

February when traders were betting on two cuts in 2026.

Germany's 10-year bond yield rose to its highest

level since 2011 at more than 3.1%.

The U.S. dollar index, which tracks the currency

against six peers, rose 0.1% for a fourth straight session of

gains.