London stocks were set to slump at the open on Monday after US President Donald Trump threatened tariffs on countries opposed to a US takeover of Greenland.
The FTSE 100 was called to open down around 60 points.
Market sentiment was set to take a hit after Trump announced over the weekend tariffs of 10% from 1 February, rising to 25% from the 1 June, for eight European countries opposing US efforts to acquire Greenland.
The 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.
Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Needless to say, gold kicked off the week by refreshing records, hitting $4'690 per ounce in Asia. Silver also traded at a record high, just above $94 per ounce, and copper is also up.
"The US dollar is down on revived trade tensions, and European futures are unsurprisingly preparing for a bearish start to the week. In the US, it's a bank holiday.
"So my feeling, looking at the news flow, is that the foundations of a potentially significant market selloff are being laid - whether due to geopolitical frictions or renewed trade tensions."
On home shores, industry data showed UK 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.
The average asking price now stands at £368,031, while the number of available homes for sale is the highest it has been at this time of year since 2014.
Rightmove's Colleen Babcock called it an "encouraging" start to 2026, especially following the muted growth seen in 2025.
"Over the last week, buyer demand is lower than last year, when buyer activity was boosted by some buyers trying to find a property before stamp duty rose in April.
"However, buyer demand is in line with 2024. It's an encouraging early snapshot, and as the start of the year progresses it will become clearer if this momentum is maintained into the peak spring selling season."
The unusually long build-up to last year's Budget - which was held in November, a month later than normal - weighed heavily on consumer sentiment.
However, despite widespread speculation and leaks, in the end the Budget did not include as many tax rises as feared.
Further supporting the housing market since then was a quarter point reduction in the cost of borrowing, to 3.75%, in December, and the prospect of more cuts to come.
Data from Rightmove showed a 57% spike in buyer demand in the two weeks after Christmas Day in 2025, with the number of homes newly listed for sale rising by 81% compared to the fortnight before 25 December.
Rightmove said Boxing Day had been its busiest ever for visits to the platform.
Year-on-year, house prices rose 0.5% in January.
In corporate news, landscaping supply group Marshalls said it expected 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.
In a trading statement, the company added that the outlook for 2026 "continues to be uncertain" but it was confident that cost cutting last year would deliver an improved financial performance.
Travel retailer WH Smith appointed Leo Quinn to the role of executive chairman with effect from 7 April. Quinn will succeed current chair Annette Court, who will step down at the end of WH Smith's annual general meeting on 2 February.
Workspace Group announced that chief executive Lawrence Hutchings is to leave 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), who will join at the start of next month.