European stocks lower on Trump impeachment move, trade fears

European stocks lower on Trump impeachment move, trade fears

London Stock Exchange LSE
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LONDON: European stocks slid on Wednesday (Sep 25) after US Democrats launched a formal impeachment inquiry against Donald Trump and the US president renewed trade war fears.

The pound meanwhile dropped as British MPs returned to parliament one day after a momentous Supreme Court ruling that Prime Minister Boris Johnson's decision to suspend parliament ahead of Brexit was unlawful.

"Markets have taken a bit of tumble on fears US president Trump could be impeached, while the (UK) drama ... is just as intoxicating as the Brexit drama rumbles on," noted Neil Wilson, chief market analyst at trading group

Wall Street, which closed on Tuesday with sizeable losses ahead of Democratic leader Nancy Pelosi's widely expected announcement of a formal impeachment inquiry, pushed higher on Wednesday.

Democrats accuse Trump of abuse of power in a reported attempt to pressure the newly-installed president of Ukraine to open a corruption investigation into his lead challenger for the White House, Joe Biden, and Biden's son Hunter.

Focus in Europe meanwhile was on the UK parliament after Tuesday's Supreme Court judgement dented Johnson's authority, prompting calls for his resignation and casting further doubt on his promise to pull Britain out of the European Union on Oct 31, come what may.

Concerns over US and British political turmoil added to worries over international trade after Trump ripped into China at the UN, declaring that the time of Beijing's "abuses" of the system was "over".

Touting what he argued were the benefits of his tariff war with China, Trump reiterated his hope that a trade agreement "beneficial to both countries" could be struck.

"But as I said very clearly, I will not accept a bad deal for the American people," he said.

London's blue-chip FTSE 100 index finished the day down less than 0.1 per cent, while Frankfurt shed 0.6 per cent Paris lost 0.8 per cent.

"With political storms brewing both sides of the Atlantic, investors found little appetite for riskier assets such as shares," said market analyst Fiona Cincotta at CityIndex.

Oil prices took their own hit, also after data indicated a build-up in US crude inventories.

"Oil markets continue to sell as risk sentiment remains sour after Trump accused China of currency manipulation, theft of intellectual property and product dumping," said Stephen Innes, Asia Pacific market strategist at AxiTrader.

"Mind you, this is nothing shockingly new but coming on the cusp of trade negotiations, it doesn't exactly suggest he's laying down the welcome mat for the Chinese delegation."

Key figures around 1530 GMT:

London - FTSE 100: DOWN less than 0.1 per cent at 7,289.99 points (close)

Frankfurt - DAX 30: DOWN 0.6 per cent at 12,234.18 (close)

Paris - CAC 40: DOWN 0.8 per cent at 5,583.80 (close)

EURO STOXX 50: DOWN 0.7 per cent at 3,508.98

Tokyo - Nikkei 225: DOWN 0.4 per cent at 22,020.15 (close)

Hong Kong - Hang Seng: DOWN 1.3 per cent at 25,945.35 (close)

Shanghai - Composite: DOWN 1.0 per cent at 2,955.433 (close)

Euro/dollar: DOWN at US$1.0953 from US$1.1002

Pound/dollar: DOWN at US$1.2371 from US$1.2471

Euro/pound: UP at 88.55 from 88.24 pence

Dollar/yen: UP at 107.69 from 107.34

Brent North Sea crude: DOWN 1.4 per cent at US$62.19 per barrel

West Texas Intermediate: DOWN 1.5 per cent at US$56.42 per barrel

Source: AFP/de