GLOBAL MARKETS-Stocks sag, dollar firms as US-Iran talks hit stalemate

* Dollar up as US-Iran talks stumble

* Oil rallies, stocks flat other than tech

* Trump to ​visit China ⁠this week with much at stake (Updates prices)

LONDON, May ​11 (Reuters) - Stocks dipped, while the dollar edged up on Monday as investors fretted that talks between the U.S. and Iran were at a stalemate, leaving the vital Strait of Hormuz ​virtually ‌closed, which sent oil prices up again.

President Donald Trump on Sunday rejected Iran's response to a U.S. proposal for peace talks to end the war, saying Tehran's demands were "totally unacceptable".

Brent ⁠crude futures, which are around 45% higher than before the U.S. and Israel began ⁠strikes on Iran on February 28, jumped as much as ​4.6% overnight and were last at $103.75 a barrel, up 2.4% on the day.

The MSCI All-World index was relatively flat, while in Europe, the STOXX 600 eased 0.2% and U.S. stock futures traded 0.1% lower.

The correlation between oil prices and stock markets has turned positive in the last two weeks, meaning the two ​are more likely to ‌move in tandem than in opposite directions, which had been the dynamic for most of the war so far.

Investors are looking beyond energy prices for now, given still-strong enthusiasm for anything tech-related, as well as macro data - including last week's U.S. payrolls report - showing the global economy is holding up.

"Markets are very good at assimilating this and learning to live with things that we thought were impossible. And that's where we are with crude right now. ​But if it goes up another 50%, then that will be another test that we have to navigate," IG chief market strategist Chris Beauchamp said.

"If you're ‌looking at the earnings data, it's really good. And were it not for the Iran situation, we would be really firing on all cylinders, even more so than we are. But people are content to ‌believe that, somehow, there has to be some kind of deal with Iran, however ugly," he said.

An Iranian plan sent to the U.S. stressed the need for an end to the war on all fronts and the lifting of sanctions on Tehran, along with reparations and a recognition of Iran's control ​of the Strait of Hormuz, Iranian media reported.

"The conflict in the Middle East is now entering its 11th week," said Bruce Kasman, global head of economics at JPMorgan. "Energy prices ‌have surged but remain at levels that are headwinds rather than expansion-ending obstacles."

"The risk of a sharper move rises with each week that the Strait of Hormuz stays closed, and our commodities team sees operational stress levels starting sometime in June."

Iran has effectively shut the strait, choking off a corridor that normally ⁠handles around a ⁠fifth of the world's oil and gas shipments.

The dollar edged 0.3% to 157.12 yen, while the euro ‌fell 0.12% to $1.177. Sterling lost 0.32% to trade at $1.36, as British Prime Minister Keir Starmer attempted to quell a rebellion within his ruling Labour party following the mauling in last week's local ​elections.

Optimism over AI helped drive Chinese ​stocks to 11-year highs overnight, while South Korea's chipmaker-heavy KOSPI index rose 4.3%.

Data showed China's producer prices jumped ‌to a near-four-year high, while consumer inflation also accelerated on elevated global energy costs.

The Gulf will be on the agenda when Trump visits China from Wednesday, meeting Chinese President Xi Jinping for their first face-to-face talks in more than six months.

In commodity markets, with the dollar firm and inflation worries to the fore, gold slipped 1% to $4,665 an ounce. (Editing by Stephen Coates, Gareth Jones and Mark Potter)