Europe midday: Markets lower as Trump impeachment inquiry launched

European stocks were sharply lower by midday on Wednesday as news of an impeachment inquiry into US President Donald Trump sparked worries about more political instability, while concerns about Sino-US trade relations also weighed.

At 1155 BST, the Stoxx 600 was down 1.3% at 384.68, Germany's Dax was 1.1% weaker at 12,169.54 and the French CAC 40 was down 1.5% at 5,546.16. Meanwhile, London's FTSE 100 was 1.0% lower at 7,218.77.

The impeachment inquiry, announced by House Speaker Nancy Pelosi late on Tuesday, will examine allegations that Trump pressured Ukraine's president into investigating the son of political rival Joe Biden.

Markets.com analyst Neil Wilson said previous instances of impeachment proceedings had led to instability for equities and the dollar, but added that he could not see the process getting beyond the Republican-dominated Senate.

Meanwhile, Trump used his speech at the UN General Assembly to attack Chinese trade practices, which dampened investor hopes of a speedy resolution to the US-Sino trade war.

David Madden, market analyst at CMC Markets, said: "The language used by Mr Trump was seen as tougher, which has dampened the mood a little in relation to the trade dispute, plus that is adding to the negative move in stocks."

In London, MPs reconvened after the UK Supreme Court ruled on Tuesday that Prime Minister Boris Johnson's decision to suspend parliament was unlawful, with opponents now calling for his resignation.

Joshua Mahony, market analyst at IG, said the key factor going forwards remains whether Johnson will agree to extend the Brexit deadline, as his opponents seem unwilling to call a vote of no confidence or election due to fears of defeat.

"It is worthwhile noting that while markets are fearful of a no-deal Brexit, we are also seeing significant economic weakening given the ongoing uncertainty, and thus this likely extension does mean further slowing for the months ahead."

Among individual stocks, Electricite de France was the top faller on the Stoxx 600 after it warned of possible delays to its construction of nuclear reactors at Hinkley Point, UK, and raised the estimated cost by as much as £2.9bn.

Sainsbury's climbed as the supermarket giant backed its full-year outlook and registered a slight increase in retails sales excluding fuel, though it said profits were harmed by unseasonal weather.

Osram Licht was also among the top risers after Reuters reported that Bain Capital and Advent are in advanced talks about making a new takeover bid for the Munich-based lighting group.