Irish and UK shares were mixed as the trade war between the US and China threatened to flare by the end of the week, barring a last-minute intervention by one of the combatants.
The US has threatened to impose swingeing tariffs of 25% up from 10% on $200bn (€179bn) of Chinese imports from Friday after the collapse of the talks which, as recently as last week, appeared to be heading for a peaceful outcome.
Hopes of salvaging a deal may rest on plans by Chinese officials to visit Washington in the coming days.
“Evidently the Chinese government has decided that it cannot afford to make too many concessions to the US, accounting for their decision to rewrite large parts of the trade agreement.
"This puts the two sides back at square one, and it looks like Mr Trump will now listen to the hawks, rather than those such as the Treasury Secretary, who was previously pressing for a resolution,” said Chris Beauchamp, chief market analyst at online broker IG.
"The path to a deal seems much rockier now, with volatility on the rise,” he said.
The Ftse-100 ended higher, helped by a weaker pound. After large losses earlier this week, the Dax and Cac stock indices also ended slightly higher. As the talks between the Conservatives and Labour politicians on reaching a Brexit consensus dragged on, sterling edged lower to 86.07 pence against the euro.
Jennifer McKeown, who heads up the global economics service at Capital Economics, said that the escalation in the trade war would hit the Chinese economy more than the US but that the fallout could badly affect financial markets.
“The effects on business confidence and financial markets around the world could be more significant, potentially adding to reasons for renewed policy loosening,” she said.
“And at the margin, increased trade tensions could contribute to the US Fed and the ECB adopting a more cautious stance,” Ms McKeown said.