London stocks had fallen further by midday on Monday following US President Donald Trump's latest tariff threats, but the top-flight index fared much better than its European peers, shielded somewhat by strength in the defence and gold mining sectors.

The FTSE 100 was down 0.6% at 10,176.60, but significantly outperforming its European peers, with the benchmark Stoxx 600 down 1.3%, Germany's DAX 1.4% lower and France's CAC 40 off 1.6%.

US markets will be closed for Martin Luther King Jr day.

Market sentiment took a hit after Trump said on Truth Social over the weekend that he would impose tariffs of 10% from 1 February, rising to 25% from the 1 June, on eight European countries opposing US efforts to acquire Greenland.

The affected countries are Denmark, France, Germany, the UK, the Netherlands, Sweden, Norway and Finland. Trump said the tariffs would remain in place until a deal for the sale of Greenland to the US is done.

In response, the European Union was said to be weighing a package of counter tariffs that would affect €93bn worth of US trade. Meanwhile, UK Prime Minister Keir Starmer criticised Trump but said the UK was not currently considering its own retaliatory tariffs.

In an emergency speech, Starmer insisted Trump's use of tariffs on Nato allies was "completely wrong" and "not the right way to resolve the difference within an alliance". He also reiterated that the future of Greenland was for the people of Greenland and Denmark alone to decide.

But he also told reporters that a trade war was "in no-one's interests".

Trump's latest threats came as world leaders were set to gather at the World Economic Forum in Davos, Switzerland, this week.

Dan Coatsworth, head of markets at AJ Bell, said: "Plot out the timeline of policy announcements since Trump returned to the White House and it's longer than the Bayeux Tapestry.

"Financial markets have been subjected to a barrage of heavy-hitting decisions by Trump during his second term, with endless twists and turns. A new tougher stance on tariffs towards parts of Europe in Trump's quest to own Greenland turns up the heat to max.

"Businesses and investors had just started to become comfortable with the new tariff landscape, accepting that supply chains had to evolve, and that goods and services now cost more.

"Anyone who thought Liberation Day was shocking is now gasping with their jaw on the floor when looking at what Trump has brought to the agenda in 2026. Trump's more aggressive stance since the New Year would suggest he's determined to get what he wants, and that now looks like global domination rather than simply reshaping the US.

"Going hostile against Europe had the potential to cause considerable upset on financial markets. While we've seen a red day for European shares in general, it's not panic time. What needs to be watched closely is how markets behave over the near-term. A 1% to 1.5% decline every day over a series of weeks adds up to trouble, and that's what investors are keen to avoid happening.

"Even though no-one knows how markets will behave over the near-term, there are some clues that investors are feeling cautious once more.

"Gold has hit a new record high of $4,689 per ounce as investors hide in an asset with supposed haven qualities. Defence stocks continue to be in vogue as investors take the view heightened geopolitical tensions create a stronger earnings backdrop for military and security specialists. Utility stocks were in demand as investors sought to park some of their money in a sector that should tick over whether everything is good or bad in the world.

"The omnipresence of gold miners, defence contractors and utility providers on the FTSE 100 explains why the UK blue-chip index fared much better relative to other major European indices."

On home shores, industry data showed house prices rocketed in January as the market rebounded strongly following last autumn's Budget.

According to the latest house price index from Rightmove, the national average asking price shot up by a record 2.8% this month. It is the largest-ever increase in the month of January, and the largest in any month since June 2015.

Separately, a survey showed that UK consumer confidence hit a nine-month low in January.

In equity markets, defence firms were high risers, with BAE Systems and Babcock both sharply higher, while defence technology group QinetiQ also rose. Gains for QinetiQ also came as it announced a five-year contract extension worth £205m with the UK Ministry of Defence (MOD).

Precious metals miner Fresnillo and gold miners Endeavour and Hochschild all shone as gold and silver prices hit record highs.

WH Smith shot to the top of the FTSE 250 as the travel retailer appointed Leo Quinn to the role of executive chairman with effect from 7 April. Quinn, who will succeed current chair Annette Court, has over 20 years' experience as CEO of UK publicly quoted companies, most recently as CEO of infrastructure group Balfour Beatty.

Coatsworth said: "If any business needed a corporate 'Mr Fix-it' right now it's WH Smith and the appointment of Leo Quinn as executive chair is an interesting one.

"Quinn has led previous recovery efforts at De La Rue, QinetiQ and Balfour Beatty. This may give him some credibility as he looks to rebuild trust with WH Smith shareholders bruised by a recent accounting crisis.

"Quinn clearly sees potential in the business, which benefits from a captive audience in airports and railway stations, and the nature of his compensation and a personal investment in the shares means his interests are aligned with investors'."

Vodafone gained as Citi lifted its price target on the 'neutral' rated shares to 100p from 85p.

Landscaping supply group Marshalls fell after saying it expects to report annual earnings in line with market expectations despite subdued end markets and "prolonged" pre-Budget uncertainty during the second half which saw revenues come in flat.

The company also said the outlook for 2026 "continues to be uncertain" but that it was confident that cost-cutting last year would deliver an improved financial performance.

Great Portland Estates slumped after saying that Jayne Cottam has been appointed chief financial officer with effect from 16 March. Cottam succeeds Nick Sanderson who, as previously announced, is stepping down as chief financial & operating officer on 30 January to take up the position of CFO at Savills.

Workspace Group lost ground as it announced that chief executive Lawrence Hutchings was leaving the company after just 14 months in the role. He will be replaced by Charlie Green, the former CEO and co-founder of The Office Group, now known as Fora.

Market Movers

FTSE 100 (UKX) 10,176.60 -0.57%
FTSE 250 (MCX) 23,056.44 -1.09%
techMARK (TASX) 5,880.39 -0.44%

FTSE 100 - Risers

Fresnillo (FRES) 3,964.00p 5.82%
BT Group (BT.A) 181.90p 1.65%
BAE Systems (BA.) 2,117.00p 1.39%
Babcock International Group (BAB) 1,504.00p 1.35%
Severn Trent (SVT) 2,873.00p 1.34%
Imperial Brands (IMB) 3,083.00p 1.28%
Sainsbury (J) (SBRY) 318.40p 1.14%
Vodafone Group (VOD) 101.80p 0.99%
British American Tobacco (BATS) 4,364.00p 0.88%
Tesco (TSCO) 425.70p 0.88%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 13,770.00p -4.74%
Diploma (DPLM) 5,485.00p -3.52%
Convatec Group (CTEC) 230.00p -2.79%
Spirax Group (SPX) 7,000.00p -2.57%
InterContinental Hotels Group (IHG) 134.50p -2.57%
NATWEST GROUP (NWG) 636.60p -2.48%
Diageo (DGE) 1,614.50p -2.48%
Games Workshop Group (GAW) 18,330.00p -2.34%
Croda International (CRDA) 2,684.00p -2.29%
Burberry Group (BRBY) 1,243.00p -2.28%

FTSE 250 - Risers

WH Smith (SMWH) 687.00p 9.13%
QinetiQ Group (QQ.) 534.50p 3.69%
Endeavour Mining (EDV) 4,100.00p 2.60%
Plus500 Ltd (DI) (PLUS) 4,006.00p 2.51%
Pennon Group (PNN) 556.00p 2.02%
Johnson Service Group (JSG) 143.80p 1.55%
Serco Group (SRP) 298.80p 1.29%
Hochschild Mining (HOC) 593.00p 1.28%
Wetherspoon (J.D.) (JDW) 764.00p 1.19%
NB Private Equity Partners Ltd. (NBPE) 1,588.00p 0.89%

FTSE 250 - Fallers

Ocado Group (OCDO) 265.00p -6.03%
Trustpilot Group (TRST) 220.20p -5.17%
Morgan Advanced Materials (MGAM) 226.50p -4.23%
Oxford Biomedica (OXB) 862.00p -4.12%
Raspberry PI Holdings (RPI) 287.50p -4.10%
Marshalls (MSLH) 170.20p -4.06%
W.A.G Payment Solutions (EWG) 119.00p -4.03%
Elementis (ELM) 165.80p -3.38%
Man Group (EMG) 262.80p -3.31%
AEP Plantations (AEP) 1,475.00p -3.28%