The pound is under pressure after Prime Minister Theresa May suffered stunning defeats in parliament that highlight the struggle she has in pushing her Brexit deal through

Hong Kong (AFP) - Asian markets fell Wednesday following a rout on Wall Street, as investors were bombarded by a “perfect storm” of problems from trade to Brexit that erased the positivity seen at the start of the week.

The glum mood overshadowed hints from Donald Trump at more time to resolve the China-US trade row, as well as soothing comments from China about their desire to push on with a weekend agreement between the world’s top economies.

Trading floors are awash with uncertainty over the agreement Trump hammered out with Xi Jinping to much fanfare – and an initial market rally – in Buenos Aires, with little clarity emerging and the US president shifting his tone.

While he hailed the deal at first, on Tuesday he warned on Twitter “remember, I am a Tariff Man”, adding “When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so”.

Then, in another tweet he left open the door to an extension of the agreement’s 90-day timeline to end the row.

China’s commerce ministry Wednesday called the pact “successful” and said it “will start with the implementation of the specific matters in which consensus has been reached, the sooner the better”, without providing more details.

Concerns are also mounting about the US economy after the difference in yields on two- and 10-year bonds narrowed, suggesting traders are increasingly concerned about longer-term prospects.

The are fears of an “inversion” where short-term yields overtake long-term rates, which in the past has been the precursor to a recession.

The Dow dived 3.1 percent, S&P 500 tanked 3.2 percent and the Nasdaq plunged 3.8 percent.

In Asia Hong Kong plunged 1.6 percent, Shanghai ended 0.6 percent lower and Tokyo was down 0.5 percent.

- Pound’s Brexit woes -

Singapore shed 0.8 percent and Seoul was 0.6 percent off, while Wellington dived one percent. Sydney slipped 0.8 percent after data showed the Australian economy grew at a slower pace than expected in July-September. The Australian dollar dived more than one percent.

In early European trade London fell one percent, while Paris and Frankfurt were each more than one percent lower.

The selling “has all the nasty hallmarks that traders typically call the perfect storm,” said Stephen Innes, head of Asia-Pacific trade at OANDA. He said investors “are probably left feeling duped, tricked and maybe even snookered by some ill-advised backslapping comments post-G20”.

“While trade war is certainly the number one driver of global risk sentiment, the current meltdown is morphing into a Hydra with familiar points of irritation … coming to a head,” he added.

The pound continued to struggle on concerns Britain could leave the EU without a deal, which most observers fear could hammer the economy.

Sterling briefly hit a 17-month-low $1.2659 after Prime Minister Theresa May suffered stunning defeats in parliament that highlighted the fight she has in passing her Brexit deal.

If she loses there are expectations she will face a no-confidence vote and a defeat that could force early elections, leaving the country in chaos.

“The pound is on the ropes and looks set for more falls as it seems all but certain Theresa May’s government will fall,” said Neil Wilson, chief market analyst at Markets.com. “A vote of no confidence and fresh general election now seem certainties.”

Oil prices tanked more than one percent – dragging regional energy firms – after another jump in US inventories and as Saudi Arabia raised questions about the chances of an output cut at a meeting of OPEC and non-OPEC members this weekend.

Energy Minister Khalid Al-Falih said it was “premature to say what will happen” in Vienna, days after Russian President Vladimir Putin had said the two major producers had agreed to a cap to support prices.

“We need to get together and listen to our colleagues, hear about their views on supply and demand and their projections of their own countries’ production,” he said.

Crude had surged Monday and Tuesday after Putin’s comments.

“It’s not a good price signal,” Bob Yawger, director of futures at Mizuho Securities USA, told Bloomberg News.

- Key figures around 0820 GMT -

Tokyo - Nikkei 225: DOWN 0.5 percent at 21,919.33 (close)

Hong Kong - Hang Seng: DOWN 1.6 percent at 26,819.68 (close)

Shanghai - Composite: DOWN 0.6 percent at 2,649.81 (close)

London - FTSE 100: DOWN 1.0 percent at 6,953.61

Pound/dollar: DOWN at $1.2683 from $1.2713 at 2200 GMT

Euro/dollar: DOWN at $1.1328 from $1.1342

Dollar/yen: UP at 113.06 yen from 112.78

Oil - West Texas Intermediate: DOWN 68 cents at $52.57 per barrel

Oil - Brent Crude: DOWN 80 cents at $61.28 per barrel

New York - Dow Jones: DOWN 3.1 percent at 25,027.07 (close)