* Stocks rise to trade around record highs

* Oil nurses losses on peace hopes, still above pre-war

levels

* Yen stable after spikes, intervention jitters persist

(Updates to European morning trading)

By Sophie Kiderlin and Ankur Banerjee

LONDON/SINGAPORE, May 7 (Reuters) - Stocks rose on

Thursday while oil prices sank on optimism over a U.S.-Iran

peace deal, even as the fate of the critical Strait of Hormuz

appeared unresolved.

MSCI's All-Country World Index rose 0.23% to approach record

highs. Europe's STOXX 600 was little changed, having

jumped 2.2% on Wednesday, while MSCI's broadest index of

Asia-Pacific shares outside Japan rose 1.82% to

a fresh all-time high.

Japan's Nikkei crossed 62,000 for the first time as

trading resumed after an extended holiday weekend.

While the Middle East situation was uncertain, "the momentum

is going in a good direction" and markets had taken note of it,

Lombard Odier chief economist Samy Chaar said.

"So the oil price is down from its highs, which is obviously

relieving pressure on yield curves and bond yields, and that is

great news for equity valuation and makes currencies move a

bit," he said.

A strong earnings season and relatively robust macroeconomic

environment added to a positive market mood, Chaar added.

TRUMP PREDICTS SWIFT END TO WAR

U.S. President Donald Trump predicted a swift end to the war

with Iran as Tehran considered a U.S. peace proposal that

sources said would formally end the conflict while leaving

unresolved key U.S. demands that Iran suspend its nuclear

programme and reopen the Strait of Hormuz.

Brent crude fell 1.5% to $99.82 a barrel, having

tumbled nearly 8% on Wednesday.

Even after that slide, Brent is still 40% above its

late-February level, when the conflict began, while 10-year

Treasury yields have surged - a reminder of the

strain higher energy costs continue to put on the global

economy.

On the day, 10-year Treasury yields were last down by 2

basis points to 4.334%.

Nick Twidale, chief market strategist at ATFX Global, said

the market was wrestling with execution risk, "both in terms of

whether a deal is finalised and how quickly disrupted flows

would normalise even if it is."

Rocketing oil prices whacked global markets in March but a

fragile ceasefire and prospect of a deal have spurred a risk-on

rally since April that has been fuelled by strong tech earnings

reports.

S&P COMPANIES SET FOR ROBUST PROFIT GROWTH

S&P 500 companies are on track for their strongest profit

growth in more than four years, while blowout results from

Samsung, SK Hynix and TSMC

have reinforced the upbeat tone in Asia.

Investors await the U.S. non-farm payrolls report on Friday,

with jobs expected to have increased in April by 62,000 after

rebounding 178,000 in March, a Reuters survey of economists

shows.

In currency markets, the euro nudged higher and last

fetched $1.1765. Sterling was at $1.3620, up 0.2% as UK

local elections came into focus.

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

against six units, was a touch lower at 97.892.

The yen remained in the spotlight after spikes in

recent sessions prompted market speculation that Tokyo had

intervened to support the long-battered currency.

The yen was little changed at 156.25 per dollar, having hit

a 10-week high of 155 on Wednesday.

OCBC analysts said intervention was unlikely to shift the

broader trend without "stronger policy support," for example

from the BOJ or relief from oil prices and U.S. yields,

maintaining a year-end target of 155.

Japan's top currency diplomat Atsushi Mimura said the

country faced no constraints on how often it can intervene and

was in daily contact with U.S. authorities.

U.S. Treasury Secretary Scott Bessent is due to visit Tokyo

next week, and analysts expect he will discuss yen moves with

Japanese counterpart, Satsuki Katayama.