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European markets closed lower on Tuesday as investors followed developments in the Middle East.

The regional Stoxx 600 index provisionally ended 1.6% lower with all sectors and major bourses in negative territory. Mining stocks led losses, down 3.1%, as banks fell 2.6%.

Telecoms stocks managed smaller losses of 1%, after Sweden’s Ericsson posted better-than-expected first-quarter profit. Shares were up 1.8%.

Geopolitical tensions are high following Iran’s extensive drone and missile attack on Israel Saturday night. Israel has vowed to retaliate but has signaled that it could bide its time. Allies have called for cool heads, warning about the potential for a much bigger war in the region.

Asia-Pacific markets sold off as the world awaits Israel’s response to Iran’s air assault over the weekend. Most major markets in Asia lost about 2%. Data released Tuesday showed China’s economy grew 5.3% in the first quarter from a year ago, more than the 4.6% growth expected by economists polled by Reuters.

On the European data front, U.K. unemployment rose to 4.2%, up from 3.9% a year ago, while regular wage growth excluding bonuses rose more than expected, by 6%.

“The latest jobs report is a nuanced one, but we suspect most policymakers will read it as net-hawkish on the basis of those wage figures. At the margin, it moves the dial towards an August rate cut over June, though it remains a close call,” ING Developed Markets Economist James Smith said in a note.

U.S. stocks were mixed on Tuesday. Attention stateside is on the big banks, after Morgan Stanley and Bank of America both beat on earnings estimates.

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