Mounting tensions between the United States and North Korea battered blue-chip stocks on Wednesday, knocking the London market's attempts of securing a record high.
European equities indexes were a sea of red at the close, while Wall Street indices suffered their biggest losses in near three months, deepening their fall after Trump's mid-afternoon remarks further stoked fears of a miscalculation that could lead to catastrophic consequences on the Korean peninsula and beyond.
Shares in London-listed precious metals miners Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) meanwhile have been in demand, with investors flocking to safe haven assets such as gold.
Stocks in France and Germany were down almost 1 percent in early trading, while the FTSE 100 share index in London fell 0.5 percent. "Had investors believed a real war was on the horizon, all sectors would have declined".
European markets were also struggling amid the simmering political stand-off, with the Cac 40 in France dropping 1.4% and Germany's Dax tumbling by 1.1%.
Frankfurt's DAX 30 was also down, shedding some 0.8 percent.
PACCAR Inc. (PCAR) Ownership Down in Latest Report from Alliancebernstein LP
The investment company owned 171,985 stocks of the firms shares after scooping up an extra 30,994 shares through out the quarter. PACCAR Inc (PCAR ) shares are down -3.55% for the week and that has got investors and traders sitting up and taking note.
Pyongyang responded by saying it was studying plans for an attack on Guam, a US territory and home to Andersen US Air Force Base. The dollar was at an eight-week low against the Japanese yen during Asian trading.
Hong Kong shed more than one percent and Shanghai also closed lower, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening. The index, which hovered below record highs this week, has slipped more than 3 per cent since Mr Trump said on Tuesday that the USA would unleash "fire and fury" if Pyongyang continued to issue threats.
The reclusive state raised the stakes further with a detailed plan to send a salvo of missiles towards the USA territory of Guam.
Despite the ongoing turmoil, investors' focus was slowly returning to the USA economy after Chicago Federal Reserve president Charles Evans said Wednesday it would be "reasonable" to announce the beginning of a reduction of the Fed's balance sheet next month. "In addition, working capital disappointed and the pension deficit increased".
On commodities markets, oil advanced initially after figures from the American Petroleum Institute showed a sharp decrease in stockpiles.