LONDON: European stock markets slid again on Thursday as investors sought safe havens amid tensions between the United States and North Korea, despite an easing in rhetoric.
A weaker opening on Wall Street further added to the downward pressure in Europe.
"Risk aversion is once again the name of the game... as geopolitical tensions mount and investors head for cover in the traditional safe havens," said Oanda analyst Craig Erlam.
"The war of words taking place between the US and North Korea at the moment, which includes very real threats of action, is taking its toll on investor sentiment. The level of risk aversion we're seeing suggests traders still believe the prospect of military action is very small but precautions are still being taken nonetheless, as this still has the potential to escalate very quickly and unexpectedly."
London's benchmark FTSE 100 index fell back 1.3 percent, driven by losses in the commodity sector.
In the eurozone, the Paris CAC 40 lost 0.3 percent compared with the closing level on Wednesday.
Frankfurt's DAX 30 was also down, shedding some 0.8 percent.
"While it appears that Pyongyang's detailed strike plan against Guam has created a sour backdrop to trading, it's worth noting that US/North Korea tensions aren't having quite the same effect on the DAX and CAC," said Spreadex analyst Connor Campbell.
Safe havens benefited from the move away from stocks -- gold rising again to around $1,290 an ounce after surging 1.3 percent Wednesday -- but other risky assets such as oil and copper held their price.
The European dip followed similar trading in Asia, where equities were back in the red, snuffing out a nascent recovery as tensions over North Korea lingered for a second day.
Markets had taken heart earlier in the day after US Secretary of State Rex Tillerson sought to play down the escalating war of words between Washington and Pyongyang.
But losses soon resumed, with Tokyo edging down as the Nikkei again came under pressure from the strength of the safe-haven yen, which hit eight-week highs Wednesday against the dollar.
Hong Kong shed more than one percent and Shanghai also closed down, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening.
Angry exchanges over Pyongyang's nuclear and missile programmes are stoking fears of a miscalculation that could lead to catastrophic consequences on the Korean peninsula and beyond.
The sabre-rattling -- sparked when President Donald Trump stunned the world with an apocalyptic warning to unleash "fire and fury" on North Korea -- continued Thursday as Pyongyang mocked the US leader as "bereft of reason".
The reclusive state raised the stakes further with a detailed plan to send a salvo of missiles towards the US territory of Guam.
- 'Tensions are high' -
Markets had earlier stabilised as Tillerson tried to ease tensions, saying he did not believe there is "any imminent threat" to Guam, and expressed hope diplomacy would prevail.
Despite the ongoing turmoil, investors' focus was slowly returning to the US 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.
But he also cautioned disappointing inflation data may delay interest rate increases.
On commodities markets, oil advanced after figures from industry group the American Petroleum Institute showed a sharp decrease in stockpiles, a clear indication of an easing supply glut.
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