* Push for Trump impeachment increases political risk
* European stocks tumble, U.S. futures point lower
* Oil falls on worries about global economy
* Brexit chaos deepens, pound weakens: https://tmsnrt.rs/2l2BqTR
By Karin Strohecker
LONDON, Sept 25 (Reuters) - World stocks fell to a two-week
low and risk assets dipped lower on Wednesday after U.S.
lawmakers called for an impeachment inquiry into President
Donald Trump, increasing the prospects of prolonged political
uncertainty.
The move by Democrats in the House of Representatives
exacerbated market anxieties running high over global recession
risks as well as the U.S.-China trade dispute.
Trump delivered a stinging rebuke to China's trade practices
in a speech on Tuesday, adding to the pressure after more
conciliatory tones in recent days. Adding to geopolitical tensions is uncertainty over the
outlook for Britain's Brexit chaos after the Supreme Court ruled
Prime Minister Boris Johnson had unlawfully suspended
parliament.
MSCI's global stock index .MIWD00000PUS dropped 0.4% in a
fourth straight day in the red - the longest losing streak since
the end of July rout.
European shares suffered broadly with the pan-European STOXX
600 .SXPP dropping 1.4% as technology stocks .SX8P lead the
losses. .EU France's CAC .FCHI tumbled 1.6% with
export-reliant Germany .GDAXI falling 1.3%.
"It is hard to imagine how long can the truce with China
remain on trade and that is adding to the general cautious
environment for stocks," said Neil Mellor at BNY Mellon in
London. "As soon as markets start worrying about trade, they
look at central banks for help but there is increasing pushback
from them too."
The downturn in Europe followed declines in Asia where
Tokyo's Nikkei .N225 suffered its largest loss in three weeks
while China .SSEC and Hong Kong .HSI dropped 1% or more.
Risk assets elsewhere also took a beating with China's
offshore yuan fell, while oil futures extended declines.
"Chinese shares were already exposed to downside risks.
Trump's comments likely increased those risks," said Kiyoshi
Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset
Management Co in Tokyo. "There are worries about U.S. consumer
sentiment. There are also concerns that China's economic
slowdown hasn't stopped."
The downturn looked to continue in the United States, with
U.S. stock futures ESc1 indicating a 0.1% decline at open.
The impeachment inquiry push and disappointing U.S. economic
data had knocked Wall Street on Tuesday, sending the S&P 500
.SPX 0.84% lower, its biggest daily decline in a month.
The U.S. House of Representatives will launch a formal
impeachment inquiry over whether Trump sought help from the
Ukraine to smear former Vice President Joe Biden, a front-runner
for the 2020 Democratic presidential nomination. It is unlikely that the impeachment inquiry would lead to
Trump's removal from office. Even if the Democratic-controlled
House voted to impeach Trump, the Republican-majority Senate
would have to take the next step of removing him from office
after a trial. REMARKABLE
Markets have already been roiled by political disquiet in
Hong Kong to Britain to Italy and the Middle East.
"Although nothing seems that abnormal these days, yesterday
was pretty remarkable as two of the most powerful leaders in the
world faced serious misconduct/legal charges and accusations,"
said Deutsche Bank's Jim Reid.
The dollar index .DXY measuring the greenback against a
basket of six major currencies nudged 0.2% higher.
Sterling dropped 0.4% to $1.2445 GBP=D3 , reversing most of
its gains from Tuesday. Johnson vowed Britain would leave the EU
by an Oct. 31 deadline come what may but is facing reinvigorated
opposition to his plans after the Supreme Court ruled he had
unlawfully suspended parliament. Britain's FTSE index .FTSE
dropped 0.8%. "Predicting the ultimate outcome of Brexit remains
difficult," said Mark Haefele, Chief Investment Officer, UBS
Global Wealth Management. "As a result, the longer-term
risk-return outlook for UK equities looks uncertain. We still
advise being nimble on sterling."
Forex markets elsewhere were also in a risk risk-off mood,
with the Australian dollar AUD= and most emerging-market
currencies lower.
The move safe haven assets also saw euro zone government
bond yields edge lower, with 10-year benchmark euro zone
government bond yields down 1 to 2 bps on the day DE10YT=RR ,
The yield on benchmark 10-year Treasury notes US10YT=RR
rose to 1.6387%, while the two-year yield US2YT=RR stood at
1.6076%.
U.S. crude CLc1 dipped to $56.51 a barrel while Brent
crude LCOc1 eased to $62.12 per barrel - both down nearly 1
dollar. O/R
Asian countries top export items to China https://tmsnrt.rs/2NyAIcQ
GBP volatility https://tmsnrt.rs/2l2BqTR
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