UPDATE 2-European shares finish at 2-week low but shave losses on Trump's China trade comments

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* Trade deal with China may happen sooner than expected -
Trump
* STOXX closes down 0.6%
* Market on course for first weekly loss in six
* Tech, travel biggest loser among major sub-sectors
* Tobacco companies rally

(Updates to close)
By Susan Mathew and Sruthi Shankar
Sept 25 (Reuters) - European shares closed at a two-week low
on Wednesday on investor fears about an impeachment inquiry into
U.S. President Donald Trump and worsening rhetoric on U.S.-China
trade, but shares did shave losses in late trade when Trump said
a trade deal with China could happen sooner than expected.
London stocks cut almost all of their losses and ended
steady, boosted by a 1% slide in the pound and a rally in
tobacco companies. .L
The pan-European stocks index .STOXX lost as much as 1.4%
during the session but closed down 0.6% after recovering some
ground in the last hour of European trading on Trump's comment
about the possibility of a trade deal with China. Trump made the comment to reporters a day after delivering a
stinging rebuke to China's trade practices at the United Nations
General Assembly. Stocks were also pressured by political uncertainty after
Democrats in the U.S. Congress moved to launch a formal
impeachment inquiry. The trade-sensitive tech sector .SX8P was among the
biggest decliners, down 1.2%, albeit well-off session lows.
Semiconductor shares including AMS AMS.S and ASM
International ASMI.AS lost, while export-reliant Germany
.GDAXI slipped 0.6%, putting the STOXX overall firmly on
course for its first weekly fall since mid August.
Equity markets have been rankled by a slew of poor euro zone
economic and political news this week. Data on Monday showed
business growth had stalled across the currency bloc.
Weak PMI surveys, recent profit warnings from European
companies, U.S. political uncertainty and fresh Brexit twists
were leading markets to take a pause, said Will James, senior
investment director for European equities at Aberdeen Standard
Investments.
The pound GBP= was battered as investors priced in many
more months of Brexit and general election risk a day after UK's
Supreme Court ruled that Prime Minister Boris Johnson's decision
to suspend parliament was unlawful. GBP= That helped Britain's FTSE 100 .FTSE outperform regional
peers, as did a rally in British American Tobacco BATS.L and
Imperial Brands IMB.L after merger talks between U.S. rivals
Philip Morris PM.N and Altria MO.N collapsed. After two days of solid gains, travel company TUI TUIT.L
was the biggest decliner on the travel and leisure .SXTP which
logged it biggest daily fall in six weeks.
Shares in France's EDF EDF.PA dropped 6.6%, to the bottom
of the STOXX 600, after the state-controlled power group said
its Hinkley Point C nuclear plant in Britain could cost an extra
$3.6 billion.