European stocks fell in early Monday trading but losses were limited and markets appeared to stabilise amid the ongoing crisis in North Korea after President Donald Trump vowed trade action against the rogue nation and it neighbours after it tested a powerful hydrogen bomb over the weekend.

The Stoxx Europe 600 index, the broadest measure of regional share prices, was marked 0.5% lower by mid-day in Frankfurt, with financial sector stocks among the most notable decliners. Germany's DAX index and France's CAC-40 were both down about 0.5% each.

Britain's FTSE 100 was seen 0.25% lower, with the benchmark getting support from a jump in gold prices, which rose more than $13 an ounce to around $1,337 in early European trading. Gold mining companies Fresnillo plc and Randgold Resources Ltd. were marked 2.3% and 1.7% higher respectively.

The euro gained around 0.4% against the dollar from Friday's close to trade at 1.1904 while the U.S. dollar index, which measures the greenback's strength against a basket of six global currencies, slipped 0.4% to 92.52.

The currency moves are likely to weigh on European stocks throughout the session as investors wait for a U.N. Security Council meeting later today and asses the potential for a military response from the United States.

Trump met with hits tops aides, including retired Marine Corps General John Kelly, on Sunday, but said only "we'll see" when asked if he was prepared to respond to North Korea's H-bomb test, which officials in Japan described as "ten times" more powerful than what was dropped on the city of Nagaskai in 1945, with military force.

North Korea is at it again.
North Korea is at it again.

Trump also vowed to cut off trade ties with any country doing business with North Korea, an implicit threat to both Seoul and Beijing, both of which the President has repeatedly accused of foot-dragging and appeasement in dealing with North Korea.

The United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea.

— Donald J. Trump (@realDonaldTrump) September 3, 2017

U.S. Treasury Secretary Steven Mnuchin told Fox News Sunday that he would draft a sanctions package for the President indicating that "anybody that wants to do trade or business with them would be prevented from doing trade or business with us ... people need to cut off North Korea economically. This is unacceptable behavior."

Stocks in Asia retreated overnight amid the rising regional tensions and the firm moves into safe-haven assets, with the yen rising to as high as 1.0922 against the dollar and the benchmark Nikkei 225 falling 0.93% to close at 19,508.25 points. The region-wide MSCI Asia ex-Japan index was marked 0.11% lower by the start of trading in Europe.

U.S Treasuries won't change hands today, owing to the Labor Day holiday in the United States, but investors have been marking down U.S. equities in-line with the broader global market reaction, taking S&P 500 eMini futures 0.46% lower to 2463.

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