Global markets struggle on trade war and Brexit

European stocks steadied on Wednesday, but sentiment remained fragile as negotiations for a Brexit withdrawal deal seemed all but dead and the U.S.-China trade dispute triggered another round of selling.

Markets dropped this on concern the U.S.-China conflict over trade and foreign policy is nowhere near a resolution and is increasingly damaging the global economy. Asian stocks suffered their biggest fall in a week on Wednesday, following heavy losses on Wall Street and in Europe on Tuesday. European shares managed to find a floor, however, with the pan-European Euro STOXX inching up 0.1%. Germany’s DAX rose 0.48%, France’s CAC 40 and Britain’s FTSE 100 0.28%.

Washington and Beijing are engaged in a year-long row that has expanded beyond trade policy, suggesting even more damage to a global economy that is already showing signs of slowing. Hopes that the two sides could reach a truce this week faded after Donald Trump’s administration introduced visa restrictions on Chinese officials and added more Chinese companies to a U.S. trade blacklist.

A U.S. official said high-level trade talks would still take place on Thursday and Friday as planned, but Trump has said tariffs on Chinese imports will rise on Oct. 15 if no progress is made in the negotiations.

Oil prices fell for a third consecutive day as traders worried about the impact of the U.S.-China tensions on global demand.

In Europe, talks between the European Union and Britain over an agreement to cover London’s departure from the EU on October 31 appeared to be going nowhere. British lawmakers have voted to force Prime Minister Boris Johnson to seek an extension to the departure date if he cannot agree a deal, but the prospect of more prolonged political uncertainty is worrying investors.

Sterling was last up 0.5% after a media report that the EU would make a major concession in the negotiations. Many economists say markets have already priced in the failure to reach a deal any time soon.