The FTSE 100 Index closed down 44.67 points at 7,498.06 after US President Donald Trump told North Korea he would unleash "fire and fury like the world has never seen" following suggestions the country can now strike America with a nuclear missile.
Meanwhile, Coca Cola HBC AG (LON:CCH) was the top performer on the index, with shares up 9.10% after the beverage company's bottling plant operator reported an increase in first-half earnings, thanks to strong volume growth, price increases and improved packaging.
European shares fell back on Wednesday as geopolitical tensions sent all major benchmarks into negative territory, accompanied by a slight uptick in volatility in what is typically a quiet period of summer trading for the market.
ANALYST'S TAKE: "The tensions between North Korea and the U.S.is an excuse for profit-taking", Seo Sang Young, an analyst at Kiwoom Securities.
MARKETS OVERSEAS: In Europe, Germany's DAX was down 1.1 percent, while France's CAC 40 fell 1.4 percent.
Still, analysts said the market seemed to be a bit skeptical that the North Korea situation would grow into a major crisis, noting that the losses were still not that deep. Eastern time. The Dow Jones industrial average slid 64 points, or 0.3 percent, to 22,020.
American and South Korean officials said they would move forward with large-scale military exercises later this month, which North Korea claims are a rehearsal for war.More news: Alvaro Morata Says Critics Are Already 'Killing' Him
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Worldpay Group PLC (LON:WPG) added to gains, as shares rallied 1.34%, still supported by news on Wednesday that US credit card processing company Vantiv agreed to buy the British group for £8 billion.
G4S (GFS.L) led fallers, down 7.5 percent despite the security group reporting first-half profit up 7.6 percent and saying its turnaround was on track. The stock fell $2.25 to $20.79.
United States stocks ended lower on Thursday, and Asian markets fell sharply, with Hong Kong's Hang Seng index dropping 2%. The FTSE 100 index of leading British shares was 0.6 percent lower.
BONDS: Bond prices rose.
In oil, the price of Brent crude sunk by 0.5% to 51.65 USA dollars a barrel amid concerns about over supply in the market. Euro zone blue chips slipped 1.1pc.
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.
The broad-based S&P 500 shed 0.6 percent to 2,459.50, while the tech-rich Nasdaq Composite Index tumbled 0.8 percent to 6,299.12. Australia's S&P/ASX 200 edged down almost 0.1 percent.