The FTSE 100 index was pulled down 0.6% to end at 7,498.06, putting an end to a four-session winning streak.
Tensions with North Korea appear to have finally shaken the confidence of United States investors, after the S&P 500 opened 0.8% lower, threatening to end its 15-day streak with a closing streak of more than 0.3%, a 90-year record.
"Despite Brent Crude (oil) pushing above $53 per barrel.there was a sea of red in the commodity sector", said analyst Connor Campbell from Spreadex.
Frankfurt's DAX 30 was also down, shedding 0.1 per cent at 12,142.62 points.
The stock market jitters came as North Korea outlined plans to launch missiles aimed at the waters off the coast of the US Pacific territory of Guam.
Safe havens benefited from the move away from stocks - gold rising again to around $1,279 an ounce after surging 1.3 percent Wednesday - but other risky assets such as oil and copper held their price.
"If tensions between the USA and North Korea escalate further, we think that the implications for equities in South Korea and elsewhere will remain limited provided that war does not actually break out", wrote Oliver Jones, assistant economist at Capital Economics. Those shares tracked a climb of more than 1% in gold prices, to almost $1,280 an ounce.
Angry exchanges over Pyongyang's nuclear and missile programmes are stoking fears of a miscalculation that could lead to catastrophic consequences on the Korean peninsula and beyond.
Korea's Kospi stock benchmark lost 1.1% as geopolitical concerns grew, clipping its year-to-date gain to 16.9%.
Tillerson's tone was in sharp contrast to that of USA president Donald Trump, who warned on Tuesday any North Korean threat to the U.S. would be met with "fire and fury".
Markets had earlier stabilised as Tillerson tried to ease tensions, saying he did not believe there is "any imminent threat" to Guam, and expressed hope diplomacy would prevail.
"Tensions will continue to mount and could eventually develop into a "black swan" event that the markets are not prudently considering", said Steve Hanke, professor of Applied Economics at America's Johns Hopkins University. "In addition, working capital disappointed and the pension deficit increased".