Global stock markets fell sharply as tensions flared after Donald Trump renewed threats to seize control of Greenland. The FTSE 100 slid more than 120 points, down 1.3% to 10,068.4 in early Tuesday trading after a 0.4% fall on Monday.

US financial markets were closed on Monday for Martin Luther King Jr Day, but futures trading pointed to steep falls when equity trading reopens on Tuesday. European markets were also weaker, with Germany's Dax down 1%, France's Cac 40 off 0.9%, following heavy losses in Asia. Over the weekend, President Trump warned of tariffs of up to 25% on countries that oppose his plans for Greenland, including the UK.

Trump, who is travelling to Davos, Switzerland, on Tuesday for the World Economic Forum, ramped up his threats on acquiring the Arctic territory. In a raft of posts on his Truth Social platform overnight on Tuesday, he discussed taking over Greenland, a territory of America's NATO ally, Denmark.

Investors have moved into safe-haven assets, pushing gold to a fresh record of $4,728 an ounce. UK Government bonds, also known as gilts, edged higher amid a broader global sell-off. The pound continued to rise against a weak US dollar, up 0.4% at 1.348 dollars, but was 0.3% lower at 1.15 euros.

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