Britain's top share index fell 0.8 percent early on Tuesday with investors nervous after reports that North Korea fired more short range missiles, denting oil and metal prices and pressuring commodity stocks. By 0757 GMT the FTSE 100 was down 36.45 points at 4,328.84 after gaining 0.5 percent on Friday. The index is down 2.1 percent this year, but has gained over 25 percent since touching a six-year trough on March 9.
North Korea, condemned by the international community for its latest nuclear test, on Tuesday accused the United States of being hostile.
Further increasing tension, Yonhap news agency quoted a South Korean government source as saying North Korea fired two short range missiles.
This, combined with a an OPEC meeting later in the week, which is expected to keep output unchanged, pushed the price of crude down over $1 to around $60.60, hitting energy stocks.
BP, Royal Dutch Shell, BG Group, Tullow Oil and Cairn Energy fell between 0.6 and 2.2 percent.
"Developments in North Korea are overshadowing things and adding nerves into the fray," said Keith Bowman equity strategist at Hargreaves Lansdown.
Banks, which also tend to suffer as risk aversion increases, were also broadly weaker though Barclays outperformed, down 0.5 percent after Oriel raised it to "buy" from "hold".
Lloyds Banking Group fell 3.8 percent despite Oriel raising it to "add" from "hold" while HSBC fell 1.4 percent after Oriel cut it to "add" from "buy".
On the domestic front, retiring Bank of England policymaker David Blanchflower said he feared his colleagues could quash any economic recovery by tightening monetary policy too soon, in comments reported in the Sunday Telegraph.
No important UK economic data is due for release on Tuesday, so investors will eye U.S. indicators for any evidence that might point to economic recovery, notably key consumer confidence data at 1500 GMT.
Cable & Wireless fell 2.3 percent after Credit Suisse cut it to "underperform" from "neutral".
Pennon Group and midcap Northumbrian Water fell 3.7 and 4.1 percent respectively after Banc of America-Merrill Lynch downgraded both to "underperform" from "neutral" on valuation grounds.
Rexam, the world's largest beverage can maker added 1.8 percent after Goldman Sachs added it to its Conviction Buy list and raised it to "buy" from "neutral" on valuation grounds.
Defensive tobacco stocks British American Tobacco and Imperial Tobacco were also in positive territory as investors looked to assets perceived as safe havens.
