Global Markets Fall Ahead of Pelosi’s Taiwan Visit

Global Markets Fall Ahead of Pelosi’s Taiwan Visit #Global #Markets #Fall #Ahead #Pelosis #Taiwan #Visit Welcome to Lopoid

Global stocks fell, led by declines in Chinese stocks, ahead of U.S. House Speaker

Nancy Pelosi’s

planned visit to Taiwan amid heightened tensions between Beijing and Washington. 

The Shanghai Composite index was down 2.1% in Tuesday afternoon trading, while Hong Kong’s Hang Seng fell 2.3%. Both benchmarks tumbled more than 3% in early trading before recouping some losses. 

U.S. equity futures were also lower, indicating that American stocks could come under pressure when U.S. markets open. In afternoon trading in Hong Kong on Tuesday, e-mini futures tied to the S&P 500 and Nasdaq 100 were about 0.5% lower.

Mrs. Pelosi is scheduled to arrive in Taiwan on Tuesday evening local time and meet with Taiwanese government officials, in what would be the first visit by a House speaker to the democratically governed island since 1997.

Beijing, which claims Taiwan as part of its territory, has warned Mrs. Pelosi not to set foot there. Chinese officials have threatened unspecified military countermeasures should her visit proceed. 

Investors are worried that Mrs. Pelosi’s trip could worsen an already strained U.S.-China relationship, and are taking a cautious stance, said

Jason Hsu,

chief investment officer at asset-management company Rayliant Global Advisors. The market, however, “is not pricing in a China invasion of Taiwan,” he added. 

Taiwan’s stock benchmark, the Taiex, dropped 1.6% on Tuesday, while the Nikkei 225 index closed 1.4% lower. The yield on the benchmark 10-year U.S. Treasury note fell 0.06 percentage point to 2.55%, according to Tradeweb. 

An escalation of U.S.-China tensions could cause global investors to dump Chinese assets again, said Daryl Liew, head of portfolio management at REYL Singapore. He said it comes at a delicate time, as investors in recent months had been gradually warming to Chinese stocks after previous bouts of market turmoil. “This geopolitical event is putting a huge dent on that,” he added. 

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