European stock markets all closed lower on Monday after another session of heavy selling as investors remained in a state of panic after the British public decided to leave the European Union in a referendum last week.
The efforts to calm investors of Chancellor of the Exchequer George Osborne in an early morning statement and Prime Minister David Cameron in an address to lawmakers were in vain. Both said the largest U.K. banks were 10 times better capitalized than before the credit crisis. And both stated the U.K. was embarking on Brexit from a "position of strength."
Cameron told lawmakers he would establish an EU unit to handle Brexit. The unit would comprise on key figures from the Cabinet, the Treasury, the Foreign Office and the Business Department.
"It will be responsible for ensuring the new Prime Minister has the best possible advice from the moment of arrival," he said.
He also promised to "fully involve" the devolved governments of Scotland, Northern Ireland and Wales in the Brexit preparations.
The UK's mid-cap, and domestically focused, FTSE 250 was the worst performing index on the continent after it fell by a further 7% during the Monday session, extending its one-week loss to 11.8%. This brought the bell-weather of mid-market companies in the U.K. to its lowest level since October 2014.
Ironically, the U.K.'s heavyweight FTSE 100 index outperformed all others on the continent, barring Spain's Ibex, when it closed just 2.6% lower for the session at 5,982.20. This was despite another bloodbath in the British banking sector. The index is now just 3.5% lower over a one-week timeframe.
The strong performance from London's heavyweight blue chip index shouldn't come as too great a surprise to anybody though, given that around 75% of FTSE 100 revenue is drawn from outside of the UK.
The upside of the index's international diversification is that the devaluation of the pound will now mean that many FTSE 100 companies may be in line to receive an additional boost to earnings from foreign exchange gains this year.
The index is also top-heavy with oil, gas and mining companies, many of which have performed strongly in recent days as investors sought to own real assets and responded to higher gold prices.
The strongest risers on the FTSE 100 were once again gold miners Randgold Resources (GOLD) - Get Report and Fresnillo (FNLPF) , which closed higher by 8.6% and 7.6% respectively. The biggest detractors from returns for the index were house-builders and the budget airline stock easyJet. (ESYJY)
In France, the Cac 40 closed lower by 2.97% at 3,984.72, as investors tried to gauge the potential economic fallout of the U.K.'s retreat from the EU. Insurance giant Axa (AXAHY) lost nearly 10% of its value as the European life insurance sector fell off dramatically in response to concerns over the prospect of interest rates remaining lower for longer and the potential hit that this could deliver to investment income at the group.
In Germany, the Dax closed 3.02% lower for the session at 9,268.66, with airlines and carmakers leading the decline as German investors responded to the prospect of travel and trade disruptions should the U.K.'s exit from the European Union become a disorderly one. Airline Lufthansa (DLAKY) was the biggest loser in Frankfurt after the stock closed 8.2% lower for the session.
In Spain, the Ibex 35 closed 1.8% lower after elections returned Prime Minister Mariano Rajoy to power, albeit without an absolute majority. The modest slump in Spain's heavyweight index was led by International Consolidated Airlines stock, which fell by almost 18% during the session.