12 August, 2017
Tensions with North Korea appear to have finally shaken the confidence of United States investors, after the S&P 500 opened 0.8% lower, threatening to end its 15-day streak with a closing streak of more than 0.3%, a 90-year record.
A weaker opening on Wall Street further added to the downward pressure in Europe.
The UK blue-chip index closed 113 points, or 1.5%, lower at 7,385, steadily losing ground as the trading session wore on.
The FTSE 100 is clearly in a slump, brought on in part by the tensions between the USA and North Korea, which could eventually culminate in nuclear war.
Deutsche Bank lost 2.3% and insurer Allianz fell 1.8% in Frankfurt, while lender Credit Agricole and insurer AXA declined 2.5% each in Paris.
"It could be another rough day for European equities", said ETX Capital analyst Neil Wilson.
Gold - generally regarded as a safer asset in times of uncertainty - hit its highest price for more than two months on Friday, touching $1,288.97 an ounce at one point.
"We assume markets will move on if it remains purely a war of words but the selloff looks durable", he added.
Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday his statement might not have been "tough enough".
The European Union has responded to the North Korean threats to send a salvo of missiles toward the U.S. territory of Guam by expanding the sanctions blacklist to align the EU's punitive measures with a new United Nations Security Council resolution.
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.
On commodities markets, oil advanced initially after figures from the American Petroleum Institute showed a sharp decrease in stockpiles.