Banks, airlines and housebuilders saw their shares plunge further into the red today, as investors grappled with the fallout from the UK's decision to leave the European Union.

By the close the FTSE 100 index has lost 2.5 per cent, or 156.4 points at 5,982.2. The pound slid 3.4 per cent against the dollar after Friday's record loss.

Some of the biggest losers were easyJet which fell 24 per cent, as it warned on earnings, while banks RBS, Barclays and Lloyds all posted more big falls, down 15 per cent, 17 per cent and 10 per cent, respectively.

And in a further sign of stress in the markets, investors dashed to the safe haven of gilts and send yields on ten-year UK government bonds down below 1 per cent for the first time - to just 0.934 per cent.

Airline easyJet was the biggest faller today, as it said that Brexit and terror fears would hit performance

The pound gave up 3.5 per cent against the dollar to stand at $1.319 this afternoon and lost 2.8 per cent against the euro at €1.197.

Some London shares racked up huge losses again despite attempts by Chancellor George Osborne to try and calm markets in a speech before the opening bell. He also said there would be no Brexit Budget until a new Tory leader replaced David Cameron.

All three of the UK's leading banks were downgraded by brokers this morning.

RBS felt the brunt of the City's wrath as Jefferies, Barclays Capital, RBC Capital Markets and JP Morgan Cazenove all revised down their assessments of the stock.

At one point trading in Royal Bank of Scotland and Barclays stock was temporarily suspended - triggered when a stock rises or falls rapidly by more than 8 per cent in either direction.

European banks have also been on the sharp end negative investor sentiment. The Euro Stoxx banking index was down 4.6 per cent this session as both Deutsche Bank and Credit Suisse hit fresh lows.

Meanwhile in Italy the government promised it will step in to sure up its troubled banking sector, after UniCredit declined 7.2 per cent and Intesa lost 7.6 per cent.

The more domestically-focussed mid-cap FTSE 250 has been hit harder than the more international FTSE 100 in the aftermath of Brexit.

The FTSE 250 finished down 7 per cent at 14,967.8 at lunch.

Laith Khalaf, senior analyst, Hargreaves Lansdown: said ‘The UK stock market is about as divided as the British electorate over Brexit, with large caps doing better than mid-caps, and international companies outperforming their domestic counterparts.

‘While overall the FTSE 100 index has held up relatively well in the aftermath of the EU referendum, there have been some high profile casualties, chief amongst them banks, housebuilders, and airlines.

‘But even in the banking sector there has been a substantial divergence in fortunes, with Lloyds seeing about a third of its value shaved off in two days, while HSBC came through relatively unscathed, suffering a price fall of around 5 per cent.

‘Private investors continue to buy into the market, with banks and house builders proving to be the most popular purchases. Adventurous investors with a long time horizon might consider starting to drip feed money into the market, but they’ll need to hold onto their hats as it’s likely to be a choppy ride.’

Tumbling price: The pound has collapsed against the US dollar since the Brexit vote came in

Markets had shown signs of calm early this morning as Chancellor Osborne said that the UK was ready to face the future 'from a position of strength' and indicated there will be no immediate emergency Budget.

It was the first time in three days that he had appeared before the electorate after the historic Brexit vote - adding that he would not quit as Chancellor.

But the political vacuum caused by the vote remained investors core concern and panic quickly spread through the global financial markets with so many questions still left unanswered - notably when the EU-leaving Article 50 be signed by Britain and by who.

Osborne provided no time frame, stating that only the UK could begin the process of leaving the EU by triggering Article 50 of the Lisbon Treaty. European leaders have called for the UK to sign the document by Tuesday.

Hit hard by Brexit: The biggest fallers on the FTSE 100 at 3.30pm on Monday 27 June 2016

Firms that earn in dollars dominate the list of the FTSE 100 top risers at 11am on 27 June 2016

Mic Mills, at Capital Index, said: 'A major concern for continued uncertainty is when the UK will invoke Article 50 which will formally begin the process of the UK leaving the EU, with the government in no rush to begin saying that October will be the earliest, whilst across in Europe governments are pushing for the UK to start the process sooner rather than later.'

Connor Campbell, analyst at Spreadex, added: 'The situation in Europe only worsened as the day went on.

'The banking sector is continuing to bleed out at an alarming rate; Barclays and RBS have both lost over 16 per cent, while Lloyds has fallen just shy of 10 per cent.

'On the continent things are just as bad, with Deutsche Bank currently worth around 40 per cent of what it was at this point last year after falling another 7 per cent.

'Alongside the pound, which has now lost another 3 per cent against the dollar, the banking sector is currently the biggest worry for the markets.

'That provides a headache for the Bank of England which may be facing the need for another injection of cash to maintain liquidity AND a rate cut, the latter move despite the likelihood of ballooning inflation thanks to the plunging pound.'

Across Europe markets finished in the red after initially ticking higher in the morning.

The CAC 40 in Paris lost 1.8 per cent and Germany's DAX was off 3.2 per cent - adding to the huge losses accumulated at the end of last week.

In Asia Japan's Nikkei closed 2.4 per cent higher after it made back some of the losses. Tokyo's blue-chip index tumbled almost 8 per cent at the end of last week in the wake of the Brexit vote.

Osborne: 'It was not the outcome that I wanted or that I threw everything into campaigning for. Now that the people have spoken, we in this democracy must all accept that result and deliver on their instructions'

Yet despite Osborne's attempt to reassure the markets, he also warned investors to brace themselves for more volatility.

UK politics remains firmly gridlocked and yesterday Labour leader Jeremy Corbyn came under heavy pressure to resign after his shadow cabinet stormed out over his disastrous performance in the referendum campaign.

Stocks suspended after turmoil 1. RBS 2. Taylor Wimpey 3. Barclays 4. Legal & General 5. Persimmon 6. EasyJet 7. Crest Nicholson 8. Barratt Development 9. Berkeley Group 10. Virgin Money

The meltdown continued throughout today as Mr Corbyn stood firm against the advice of many of his party.

This morning, estate agent Foxtons and budget airline easyJet issued profit warnings.

London-focused estate agent Foxtons said that the upturn it had expected in the second half of the year is 'now unlikely to materialise', adding that annual earnings will be 'significantly lower' than in 2015.

Chief executive Nic Budden said: 'Whilst we had a strong start to the year, we said in our first quarter update that we expected the first half to be challenging ahead of the EU referendum.

'Since then recent sales volumes have been slow as uncertainty and higher stamp duty has led many buyers and sellers to sit on their hands. The result of the referendum has increased uncertainty and is likely to mean that these trends continue for at least the remainder of the year.'

At the same time easyJet announced it will take a £28million hit following two months of turbulence and warned that Brexit would also have a negative impact on the airline.

Rough ride: Investors again pulled out of bank stocks on fears that they will be cut off from the single market

In May and June strikes in France and severe weather and congestion issues at Gatwick led to more than a thousand cancellations, with the EgyptAir tragedy also denting demand.

The budget airline said: 'The operating environment for all European airlines in May and June has been extremely challenging. These incidents, together with the EgyptAir tragedy, resulted in some drop off in consumer demand leading to lower yield and have impacted third quarter profit before tax by approximately £28million and have had a negative impact on third quarter revenue per seat.'