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European stocks slid Wednesday 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 Markets.com.

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

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 October 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.

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 1330 GMT

London - FTSE 100: DOWN 0.4 percent at 7,260.54 points

Frankfurt - DAX 30: DOWN 1.0 percent at 12,188.06

Paris - CAC 40: DOWN 1.3 percent at 5,556.05

EURO STOXX 50: DOWN 1.0 percent at 3,495.54

New York - Dow: UP 0.2 percent at 26,865.86

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

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

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

Euro/dollar: DOWN at $1.0985 from $1.1002

Pound/dollar: DOWN at $1.2382 from $1.2471

Euro/pound: UP at 88.72 from 88.24 pence

Dollar/yen: UP at 107.53 from 107.34

Brent North Sea crude: DOWN 2.3 percent at $61.68 per barrel

West Texas Intermediate: DOWN 2.2 percent at $56.03 per barrel

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Copyright AFP. All rights reserved.

US President Donald Trump
President Donald Trump used his UN address to hit out at China's trade 'abuses' Photo: AFP / Johannes EISELE Johannes Eisele/AFP