London — World stocks fell to a two-week low and risk assets dipped lower on Wednesday after US law makers called for an impeachment inquiry into President Donald Trump, increasing the prospects of prolonged political uncertainty.
MSCI’s global stock index dropped 0.4% in a fourth straight day in the red — the longest losing streak since the end of July rout. The downturn in Europe followed declines in Asia where Tokyo’s Nikkei suffered its largest loss in three weeks while China and Hong Kong dropped 1% or more. Risk assets elsewhere also took a beating with China’s offshore yuan fell, while oil futures extended declines.
The 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 Democrat presidential nomination. The dollar index, measuring the greenback against a basket of six major currencies, nudged 0.2% higher. Sterling dropped 0.4% to $1.2445, reversing most of its gains from Tuesday. Johnson has vowed that Britain would leave the EU by an October 31 deadline, come what may, but is facing re-invigorated opposition to his plans after the UK supreme court ruled he had unlawfully suspended parliament. Britain’s FTSE 100 index dropped 0.8%.