European stocks are set to open firmly to the downside Tuesday as investors react to a provocative missile launch from North Korea that could ignite new military tensions in the region and continue to count the economic costs of Tropical Storm Harvey in Texas and Louisiana. 

Britain's FTSE 100 is set to slide around 0.5% at the opening bell, according to financial bookmakers IG, with similar percentage declines anticipated for markets in France and Germany and European stocks find further downward pressure thanks to a surging single currency, which traded at a 2.5 year high of 1.1986 against the U.S. dollar overnight in Asia.

North Korea's latest missile test -- the first to fly directly over Japan since 2009 -- rattled investors and sent regional markets tumbling, with the Nikkei 225 falling 0.45% to close at 19,362.55 points as the yen touched an April high of 1.0833 against the greenback amid significant flows into safe-haven assets.

The region-wide MSCI Asia ex-Japan index, the broadest measure of share prices, was marked 0.47% lower by 07:30 London time while U.S. equity futures indicated a 0.33% pullback for the Dow Jones Industrial Average at the start of trading on Wall Street. 

Gold prices climbed to a 9.5 month high of $1,322 per ounce in overnight trading before paring gains to around $1,317 by the opening of London trading.

Global oil prices traded modestly higher in the Asia session, with West Texas Intermediate crude futures for October delivery rising 0.5% to $46.81 as investors reset expectations for gasoline and crude demand amid refining and drilling platform shutdowns all along the Gulf cost in the wake of Harvey's torrential rains and Category 4 winds.

European reinsurance stocks are expected to come under renewed pressure Tuesday as estimates put the direct costs of Harvey's devastation in the region of $30 billion to $100 billion, a tab that would make it the most expensive natural disaster in history.