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European stocks slide as investors brace for Brexit

Frankfurt - European stocks fell for a second day, extending losses as investors continued to speculate on the fallout from Britain’s shock vote to leave the European Union.

The Stoxx Europe 600 Index slid 0.5% to 320.25 at 09:21.

Shares tumbled the most since 2008 on Friday as the Brexit win put an end to a recent bout of optimism and set the stage for months of uncertainty while the UK negotiates its exit from the bloc. The FTSE 100 dropped 0.4% as Chancellor of the Exchequer George Osborne sought to reassure financial markets, saying that a contingency plan is in place to shore up the UK economy.

Investors will likely look to central banks for indications of possible measures to contain market volatility and support the euro-region’s already lackluster economic growth.

The European Central Bank is hosting a three-day meeting in Sintra, Portugal that will include speeches from its president, Mario Draghi, and Federal Reserve chair Janet Yellen. German Chancellor Angela Merkel will host EU President Donald Tusk in Berlin today to talk about the UK’s exit plan.

Bucking the trend, Spain’s IBEX 35 Index jumped 2.6% as acting Prime Minister Mariano Rajoy defied opinion polls to consolidate his position in yesterday’s general election. His People’s Party nonetheless fell short of a majority, requiring Rajoy to seek talks with competing parties in order to form a government.

Banks helped push Italy’s FTSE MIB Index up 0.8% after the government was said to be considering injecting capital into some of the country’s lenders after Friday’s slide.

UK banks led a gauge of European lenders lower, with Lloyds Banking Group losing 4.1% and Barclays slipping 5.3%.

Among stocks moving on corporate news, EasyJet tumbled 9.1% after warning that a drop-off in travel demand following the UK’s vote to leave the EU will pare earnings over the rest of summer period. Volvo AB fell 7.9% after saying it increased its provision for a possible European Commission fine for a suspected trucks cartel.


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