The FTSE 100 tumbled in morning trading as the City headed back to work after the Bank Holiday weekend amid increasing geopolitical tensions.
The UK's leading benchmark had fallen 1.1% to 7,323 points by lunchtime with supermarket giant Morrisons leading the way, falling 3.3% to 243p, while ITV also dropped 2.9% to 156p.
In the currency markets, the euro climbed 0.56% against the US dollar to €1.205 in intraday trading, the first time it is above €1.20 since January 2015, as the market has priced in little chance of a US interest rate rise in September contrary to the Federal Reserve policy makers' current forecasts.
According to the BBC, the euro is up almost 15% against the dollar this year and has strengthened considerably in recent months. This has been due to the improvement in the eurozone economy and markets predicting a cut back in quantitative easing from the European Central Bank.
Jaisal Pastakia, investment manager at Heartwood Investment Management, said: "The euro's fortunes this year are also at odds with those of the US dollar.
"Positioning in the US dollar reflects investors' pessimism about the ability of the Trump administration to make progress on its legislative agenda, particularly on tax reform.
"However, continuing euro appreciation versus the US dollar is questionable. The strength of the euro is a concern for the ECB, which is endeavouring to lift inflation to target.
"While the euro seems to be the market's favourite for now, it is likely to see more mixed performance going forward - after having done so well."
Elsewhere, gold climbed to its highest level in 2017 this morning after North Korea fired a missile over Japan, causing an increase in demand for the commodity, perceived to be a safe haven by investors.
Gold bullion rose 0.9% to $1,322 an ounce, the highest intraday price since November 2016.
According to Bloomberg, gold has shot up 15% this year, rising in every month barring June, as investors consider the potential for conflict between North Korean President Kim Jong Un and US President Donald Trump.
Trump has already warned he will retaliate with "fire and fury" when North Korea threatened it would launch a missile over Japan towards US territory.
The US President has also said he will use force as a means to halt North Korea from making an intercontinental missile, which could reach the US.
This has caused investor jitters this morning with the Pure Gold Company reporting it had seen a 113% increase in physical gold purchasing compared to average figures last week.
The firm also noted it has recorded a 200% increase in physical gold purchasing since May while there was a 91% increase in investors rotating out of equities into physical gold last week.
Josh Saul, CEO of the Pure Gold Company, said: "Many of our clients purchasing physical gold this morning are concerned that many factors could further tip the market.
"We have been taking orders since 5am this morning from clients citing fears that tensions between the USA and North Korea will escalate after North Korea's latest missile test over Japan.
"Trump has vowed to respond with "fire and fury" and many of our clients believe this will make the situation considerably worse, increasing the unpredictability of the geopolitical situation."