LONDON'S blue chip index followed global peers into the red amid concerns that US military exercises with South Korea could ramp up tensions with Pyongyang.

The FTSE 100 ended relatively flat, lower by 0.07 per cent or 5.1 points at 7,318.88, after dipping below the 7,300 mark in afternoon trading. But the index fared better than its European counterparts, with the French Cac 40 and German Dax falling 0.52 per cent and 0.82 per cent, respectively.

Sterling was mixed, trading 0.2 per cent higher versus the US dollar at 1.290 but 0.2 per cent lower against the euro at 1.091.

Global markets were hit by fears that geopolitical tensions between the US and North Korea may be reignited by America's pending military exercises with South Korea.

David Madden, a market analyst at CMC Markets UK, said: "Stock markets in Europe are lower on the day as traders remain nervous due to the continued stand-off between the US and North Korea.

"Tensions surrounding North Korea are still running high, and this week we could see them ratchet up as the US and South Korea will commence their annual 10-day military exercise. The North Korean regime are always upset by it, and I would be surprised if we didn't have some sort of angry reaction from Pyongyang."

With sparse market moving news on Monday, investors have also turned attention to the Jackson Hole conference in Wyoming, which will bring together the world's top central bankers, policy experts and finance ministers later this week.

European Central Bank (ECB) president Mario Draghi will join the likes of Federal Reserve boss Janet Yellen at the prestigious event, though Bank of England Governor Mark Carney will be sending his deputy governor for monetary policy Ben Broadbent in his stead.

UK macroeconomic data will also take the spotlight this Thursday, when the Office for National Statistics (ONS) releases its second estimate of second quarter gross domestic product (GDP).

Economists expect the reading of quarterly growth to remain unchanged at 0.3 per cent.

In oil markets, Brent crude prices tumbled 2.3 per cent to around $51.57 per barrel as investors wait for news from a meeting between Opec and non-Opec producers in Vienna meant to address compliance with agreed production cuts.

In UK stocks, miners gained ground on the back of rising base metal prices which were propelled by news of a multi-billion yuan injection into China's financial system by the country's central bank.

Antofagasta rose 11p to 954.5p, while Anglo American climbed 15p to 1,295p, and BHP Billiton climbed 15p to 1,366p.

Shire shares fell 151.5p to 3,613p and were one of the FTSE 100's worst performers after the pharma giant announced that it was searching for a new chief financial officer to replace Jeff Poulton, who will step down by year-end to work at a Boston start-up.

The biggest risers on the FTSE 100 were Micro Focus International up 69p to 2,243p, Pearson up 14p to 619p, Persimmon up 35p at 2,556p, and Admiral up 27p to 1,992p.

The biggest fallers on the FTSE 100 were Provident Financial down 107p to 1,745p, Shire down 151.5p at 3,613p, St. James's Place down 16p to 1,173p, and Barclays down 2.4p to 193.25p.