European stocks are set to open weaker Thursday in the second day of a global market sell off that sent U.S. markets to their steepest losses in more than eight months amid concerns over the scope of an investigation of U.S. President Donald Trump's ties to Russia.
Britain's FTSE 100 is likely to fall around 26 points, or 0.35%, at the start of trading, according to financial bookmakers IG, with similar percentage declines anticipated for the DAX performance index in Germany and the CAC-40 in France.
Overnight in Asia, the region-wide MSCI ex-Japan index notched its second consecutive day of losses with a 0.5% decline, while Japan's Nikkei 225 nursed a heavy 1.5% slump led by a firmer yen, which eroded the value of export stocks and trimmed investment flows into equities.
The yen's strength against the U.S. dollar was indicative of the move into safe-haven assets in the wake of the turmoil that has surrounded the White House and the market reaction it has sparked.
The dollar index, a measure of the greenback's strength against a basket of six global currencies, remains welded at a six-month low of 97.30 while benchmark U.S. Treasury yields, which move in the opposite direction of prices, fell to a near one-month low of 2.21%.
The moves follow an unprecedented series of events in Washington which have left the White House in seemingly permanent turmoil after Trump fired his former FBI Director, James Comey, who then appeared to suggest in a memo that the President had asked him to shut down an investigation into his national security advisor, whom he had also fired.
That allegation followed media reports that Trump had shared classified intelligence with Russia foreign minister during a meeting in the White House earlier this year.
The U.S. Department of Justice put former FBI Director Robert S. Mueller in charge of a probe into allegations that Russia interfered in last year's presidential elections and any ties between the Trump campaign and Moscow.
However, early indications from U.S. equity futures suggest Wall Street could stage a bit of a comeback Thursday after triple-digit losses for the Dow Jones Industrial Average yesterday and the steepest single-day decline for the S&P 500 since September of last year.
The Dow is set for a 35 point gain at the opening bell, futures indicate, with a 6.5 point gain for the S&P 500 and a 15.1 point comeback for the Nasdaq.