BANGKOK (AP) — Global stocks skidded yesterday after Democrats in the United States (US) House of Representatives said they intended to launch an impeachment probe of President Donald Trump.
The losses followed declines overnight as investors’ attention swung from headlines on trade to data showing a drop in US consumer confidence.
Germany’s DAX sank 0.7 per cent to 12,224.29 and the CAC 40 in Paris lost 0.9 per cent to 5,578.02. Britain’s FTSE 100 lost 0.6 per cent to 7,249.54. Wall Street was also set for losses, with the future contracts for the Dow Jones industrial average and the S&P 500 down 0.2 per cent.
Lawmakers in Britain were returning to the House of Commons following a Supreme Court ruling that United Kingdom’s (UK) Prime Minister Boris Johnson had acted illegally by suspending Parliament.
Johnson was rushing back to London, cutting short a trip to the United Nations (UN) General Assembly, amid demands for his resignation from furious opposition parties.
Johnson was due to address Parliament yesterday as he fights to extract Britain from the European Union (EU) on October 31 even if the two sides do not reach a “divorce” deal.
In the US, the announcement by Speaker of the House Nancy Pelosi about a possible impeachment inquiry came after markets closed on Tuesday though news the Democrats were considering a probe broke earlier in the day.
On Twitter, Trump described the possible impeachment inquiry as a “total Witch Hunt”.
History shows the impeachment of a President does not necessarily mean disaster for the stock market, but the impeachment issue adds to the uncertainties already overhanging markets, including strife in the Middle East and Britain’s troubled exit from the EU as well as trade frictions. “It would be difficult for the market to ascertain how long this matter will drag and the concurrent impact upon US-China trade, which is the bigger worry at present,” Jingyi Pan of IG said in a commentary.
Asian markets tracked Wall Street losses, with Japan’s Nikkei 225 index losing 0.4 per cent to 22,020.15. The Shanghai Composite gave up 1.0 per cent to 2,955.43 and the Hang Seng in Hong Kong lost 1.3 per cent to 25,948.33.
The S&P ASX 200 in Sydney slid 0.6 per cent to 6,710.20. Shares also fell in India and Southeast Asia.
Earlier in the week, investors were looking ahead to trade talks between the US and China. Tensions in the tariffs war between the two biggest economies had recently eased somewhat, prompting speculation that the next round of negotiations, in October, might at least yield an interim deal on trade.
But Trump dampened optimism with remarks before the UN General Assembly on Tuesday about the need for a “fair” trade pact. He also threatened more tariffs.
Bonds rose and pushed yields lower, suggesting renewed caution among investors. The yield on the 10-year Treasury was at 1.66 per cent from 1.7 per cent late Monday.
Benchmark crude oil fell 64 cents to USD56.65 per barrel in electronic trading on the New York Mercantile Exchange. It tumbled USD1.35 to settle at USD57.29 a barrel on Tuesday.
Brent crude oil, the international standard, gave up 83 cents to USD61.29 per barrel. It dropped USD1.61 to close at USD62.12 a barrel in London.
The dollar rose to 107.27 Japanese yen from 107.09 yen on Tuesday.
The euro fell to USD1.0996 from USD1.1020.