European shares fell sharply through the afternoon as investors sought safer assets amid the continuing tensions between the US and North Korea.
In London, the benchmark FTSE 100 index closed down 108.12 points, or 1.4%, at 7,389.94.
The falls were echoed in other European markets, with Germany's Dax index down 1.2% and France's Cac 40 falling 0.73%.
The price of gold hit a two-month high of $1284.87 an ounce as investors moved away from shares.
"Risk assets remain out of favour, as the threat of a conflict with North Korea pushes traders towards havens," said Joshua Mahony, market analyst at IG.
The FTSE 100 was also affected by a number of major companies going ex-dividend.
BT Group, Anglo American and Lloyds Banking Group were all among the biggest fallers as their shares began trading without the right to the latest shareholder payout.
But soft drink bottler Coca-Cola HBC jumped 9% after it said first-half sales had been boosted by hot weather.
Revenues in the first six months of the year rose 5.6% to 3.21bn euros (£2.9bn), helped by June's hot weather, and operating profits jumped nearly 21% to 266.4m euros.
In the FTSE 250, shares in Cineworld rose 3% after the cinema chain reported surging sales and profits.
Blockbusters such as Beauty And The Beast, Guardians Of The Galaxy Vol. 2 and The Fate Of The Furious helped the company to report a 17.8% rise in half-year revenues to £420.2m, with pre-tax profit jumping 57.5% to £48.2m.
Shares in sofa retailer DFS fell 8.4% after it warned its full-year earnings would be at the lower end of its £82m-£87m forecast.
It said second-half revenues had slid 4% after "significant declines in store footfall and customer orders" from April to June.
On the currency markets, the pound fell 0.17% against the dollar to $1.2981 and fell 0.1% against the euro to 1.1051 euros.