London - World stock markets slid on Thursday on fears that an intensifying crisis surrounding US President Donald Trump could lead to his impeachment and shatter any chances of his economy-boosting agenda being implemented.
The dollar recovered from a six-month low versus the euro but remained weighed down by the pound and yen.
"Stocks are sliding again today as traders are still spooked by the latest scandal surrounding Donald Trump," said David Madden, analyst at traders CMC Markets UK.
Europe's main stock markets were down more than one percent in mid-session dealing after Tokyo closed down by a similar amount. The euro reached a six-month high at $1.1172 before falling back.
The uncertainty sent investors fleeing to safe assets, sending the yen and gold rallying, while the dollar tumbled as dealers began to reconsider the chances of a Federal Reserve interest rate hike next month, which had been widely expected.
The greenback sank below ¥111 for the first time since the end of April.
Global equities had slumped on Wednesday, with the Dow losing 1.8% and Frankfurt shedding 1.4%, while Tokyo followed suit earlier on Thursday with a loss of 1.3%.
Investors tracked the heaviest losses in New York since Trump was elected, following claims by recently fired FBI boss James Comey that the president pressed him to drop a probe into ex-national security advisor Michael Flynn's links to Moscow.
That came a day after it was reported Trump had divulged classified information to Russia's foreign minister, fanning further allegations about his own ties to the country's leaders.
While the tycoon says he will be exonerated by a newly appointed special prosecutor who will look into the claims, analysts said the uncertainty is rocking markets globally.
There is a growing fear that Trump's plans for tax cuts, big spending and red-tape slashing - which had fuelled a global equities and dollar rally following his November election win - will be thrown off course.
"It's all about President Trump," on markets, said Greg McKenna, chief market strategist at AxiTrader.
"Impeaching Donald Trump was a pipe dream for the Democrats but extremely unlikely to most other observers until a few days ago," he added.
"As it drags on, it hurts sentiment and recently often threatens the administration's agenda - especially around tax and infrastructure."
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