London's top-flight shares dropped just over 1% on Monday as the fallout from Friday's Brexit vote continued.
The FTSE 100 Index fell 63 points to 6,075, although that was less than some market watchers had expected.
Banks were among the biggest losers as investors worried about the hit they may take from potential loss of easy access to continental European markets.
Royal Bank of Scotland (LON:RBS) dropped 13% to 177.9p and Barclays (LON:BARC) was off 10% at 138.4p.
House-builders also lost out amid worries about the impact of Friday’s vote to leave the EU on house prices.
But precious metal miners got a boost as investors sought refuge in gold, boosting prices of the yellow metal. Randold Resources Limited (LON:RRS) lifted 7.7% to 7935p and Fresnillo Plc (LON:FRES) gleamed 7.9% to 1495p.
Mike van Dulken at Accendo Markets said: “Weekend political upheaval from both sides and a leadership vacuum has done little to calm investor nerves about the near-term future.”
Among small-caps, Anglo Asian Mining Plc (LON:AAZ) ticked up 9.8% to 15.38p as the Azerbaijan-focused gold, copper and silver producer posted record production despite tough markets.
Surgical Innovations Group PLC (LSE:SUN) got a 0.125p shot in the arm to 1.825p as it forecast an increase of at least 10% in first-half revenues.
FairFX Group Plc (LON:FFX) also rose 6.8% to 31.5p on news of buoyant foreign exchange trading in market volatility following the referendum vote.
But Biome Technologies PLC (LON:BIOM) dropped 24% to 110p as the bioplastics and radio frequency technology developer forecast first-half revenues below its expectations.
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The continued shockwaves from Britain’s decision to leave the EU, combined with Labour’s decision to press the self-destruct button, will likely drive the FTSE 100 sharply lower on open.
The spread-betting firms are predicting the index of blue-chip shares will fall around 180 points to 5,958.69.
In morning trading in Asia, the currency market gave its verdict on the political chaos here in the UK, driving the pound down a 2% to US$1.3404 against the dollar.
Investors headed for haven investments such as gold, which advanced 1.5% to US$1,335.55.
Chancellor George Osborne is expected to make a statement later this morning in a bid to calm the roiling markets.
What seems to have really unsettled investors is the fact the UK appears to have made few provisions for Brexit.
“The lack of policy planning reflects badly on a UK political class more intent on being right than looking after the best interests of the country, irrespective of the outcome,” said Michael Hewson of CMC Markets.
Amid the gloom, Asia’s major markets traded higher with Japan Nikkei 225 up almost 2% and aided by currency factors.
The Shanghai Composite rose 1.1% and the Australia’s ASX edged 0.5% higher. Hong Kong’s Hang Seng was one of the few laggards, down 0.5%.
That said, the gains were made on light traded volumes and all eyes will be on London and the frosty conversations still to be had over the UK’s reverse out of the EU.
The air of uncertainty hasn’t been helped by the fact the Tories are now embarked on what commentators expect to be another divisive and toxic leadership campaign.
At the same time, any pretence of effective opposition dissolved with the sacking of shadow foreign secretary Hilary Benn, which yesterday prompted a wave of resignations from Labour’s front bench.
*Brent fell 15 cents at US$48.26 a barrel.