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European stock markets were mixed on Tuesday as investors worried about rising geopolitical tension after US House of Representatives speaker Nancy Pelosi landed in Taiwan.
Markets in mainland China and Hong Kong led losses in Asia, which have spilled into a lower European session as Beijing condemned the first visit by a US House speaker since 1997, and the White House warned of a military provocation.
Pelosi departed Washington DC with a group of five other House members for a congressional visit to the Indo-Pacific, with reports saying this will include an overnight stay in the Taiwanese capital, Taipei.
The House speaker, arrived in Malaysia on Tuesday as part of her tour in Asia. Her mooted visit to Taiwan, a democratic self-ruled island that China sees as a runaway province, has sparked concerns over a conflict.
The Chinese government has warned of "serious consequences" if Pelosi visits Taiwan.
On Tuesday morning, Reuters, citing sources, reported that several Chinese warplanes flew close to the median line of the Taiwan Strait, an unofficial dividing line with China, adding that Taiwan dispatched an aircraft to monitor the situation.
"Heightened US-China relations will likely bring short-term volatility for markets, while traders watch energy markets for signs that inflationary fears are overcooked," said Joshua Mahony, senior market analyst at online trading platform IG.
"US markets are leading the losses today, as fears around a potential military escalation with China bring risk-off sentiment back into play."
Across the pond, Wall Street indices were mixed as investors watch for rising tensions between the US and China after Pelosi becomes first highest-level visit by a government official in 25 years to Taiwan.
Asian stocks fell in the red overnight after Wall Street's fall, geopolitical tensions and concerns over economic growth soured the mood.
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