London stocks were still sharply lower midday on Tuesday amid tariff worries, as Donald Trump ramped up his rhetoric on Greenland and as investors eyed a meeting between the US president and fellow leaders at the World Economic Forum in Davos.
The FTSE 100 was down 1.1% at 10,087.09.
Russ Mould, investment director at AJ Bell, said: "Despite a difficult start to the week it feels like the market is still in wait-and-see mode over whether there will be a full-blown trade war between the US and Europe.
"Since the market close last Friday, the French and German flagship indices are down 2.5% and 2.3%, partly thanks to French luxury goods firms' and German carmakers' substantial exposure to the American market. The FTSE 100 is down a little more than 1%, with its own luxury brand Burberry also on the back foot.
"On the market Richter scale this is little more than a mild tremor - for now. However, the stakes feel high as world leaders, including Donald Trump, prepare to meet at the World Economic Forum in Davos.
"Investors will be hoping for some sort of de-escalation deal on Greenland which removes the risk of a break-up or at least serious rupture in the Nato alliance. If the crisis deepens it is unlikely to spell good news for global equities.
"US futures were pointing to losses when Wall Street resumes trading after Martin Luther King Day. Nasdaq looks set to chalk up the biggest declines amid concern about possible retaliatory action from Europe against America's big tech contingent.
"Heightened tensions continue to push precious metals prices higher and gold bugs will be eyeing the $5,000 per ounce mark after it moved through $4,720."
On home shores, figures from the Office for National Statistics showed the unemployment rate was unchanged in November, while wage growth slowed modestly.
The unemployment rate in September through November was 5.1%, unchanged on the previous month. It was, however, notionally ahead of consensus expectations for 5%.
Average growth in employees' regular average earnings, which excludes bonuses, slowed to 4.5% from 4.6%, in line with expectations. Earnings including bonuses also slowed, nudging down to 4.7% from 4.8%.
Jake Finney, senior economist at PwC UK, said: "The labour market is weakening as elevated policy uncertainty and weaker hiring start to bite. Crucially, the slowdown is now showing up in higher unemployment rather than further falls in vacancies, which are stabilising. As is often the case when the labour market slows, young people are at the sharp end of the rise in unemployment.
"The Bank of England warned in November that unemployment could rise to 5.5%, a level that may warrant more policy easing than is currently priced in. With unemployment now at 5.1%, up from 4.4% a year ago, there are signs it is moving in that direction. Even so, today's data is unlikely to move the dial on a potential rate cut on 5 February. The Monetary Policy Committee is likely to wait for the inflation figures, but a March cut looks more likely. By then, further data releases should give the Bank greater confidence that conditions have eased."
In equity markets, JD Sports, Burberry and Wetherspoons were all weaker ahead of trading updates on Wednesday.
Equipment rental firm Ashtead, which has significant exposure to the US, was also in the red.
Drugs giant GSK fell after it agreed to buy American allergy specialist Rapt Therapeutics in a $2.2bn deal.
Ibstock slumped as it said 2025 started well, with a solid increase in volumes, but market uncertainty led to progressively tougher conditions through the second half, while Big Yellow lost ground after a trading statement.
On the upside, Informa was the standout gainer on the FTSE 100 as it said strong trading through the fourth quarter, particularly in Live B2B Events, was expected to deliver full-year results in line with or ahead of market guidance. It also announced a £200m share buyback and a major new B2B events partnership in Dubai.
Gold miners Endeavour and Hochschild also shone as gold prices surged.
Market Movers
FTSE 100 (UKX) 10,087.09 -1.06%
FTSE 250 (MCX) 22,869.09 -1.05%
techMARK (TASX) 5,808.23 -1.13%
FTSE 100 - Risers
Informa (INF) 901.00p 3.28%
Severn Trent (SVT) 2,902.00p 0.97%
Coca-Cola Europacific Partners (DI) (CCEP) 6,590.00p 0.92%
Metlen Energy & Metals (MTLN) 42.33p 0.77%
The Sage Group (SGE) 1,043.50p 0.72%
Haleon (HLN) 363.60p 0.69%
Pearson (PSON) 934.40p 0.49%
NATWEST GROUP (NWG) 648.40p 0.37%
Admiral Group (ADM) 3,086.00p 0.33%
Marks & Spencer Group (MKS) 362.10p 0.19%
FTSE 100 - Fallers
Mondi (MNDI) 856.80p -3.36%
JD Sports Fashion (JD.) 77.32p -2.84%
AstraZeneca (AZN) 13,496.00p -2.84%
St James's Place (STJ) 1,448.50p -2.43%
Ashtead Group (AHT) 4,995.00p -2.25%
Burberry Group (BRBY) 1,209.00p -2.22%
Prudential (PRU) 1,168.50p -2.22%
Land Securities Group (LAND) 639.50p -2.22%
Antofagasta (ANTO) 3,535.00p -2.13%
British American Tobacco (BATS) 4,282.00p -2.08%
FTSE 250 - Risers
Pan African Resources (PAF) 131.20p 4.63%
Ocado Group (OCDO) 267.30p 2.02%
Endeavour Mining (EDV) 4,168.00p 1.76%
Hochschild Mining (HOC) 589.00p 1.55%
Bytes Technology Group (BYIT) 344.60p 1.29%
QinetiQ Group (QQ.) 526.50p 0.96%
Pennon Group (PNN) 560.00p 0.81%
W.A.G Payment Solutions (EWG) 125.00p 0.81%
4Imprint Group (FOUR) 4,385.00p 0.80%
B&M European Value Retail S.A. (DI) (BME) 171.15p 0.32%
FTSE 250 - Fallers
Pagegroup (PAGE) 190.90p -4.21%
Ceres Power Holdings (CWR) 291.60p -4.02%
Ibstock (IBST) 131.00p -3.82%
AEP Plantations (AEP) 1,405.00p -3.77%
Bridgepoint Group (Reg S) (BPT) 274.40p -3.31%
Chemring Group (CHG) 523.00p -2.97%
Quilter (QLT) 186.40p -2.71%
RHI Magnesita N.V. (DI) (RHIM) 2,545.00p -2.68%
JPMorgan Japanese Inv Trust (JFJ) 737.00p -2.64%
Wetherspoon (J.D.) (JDW) 738.00p -2.64%