While you were sleeping: UPDATED Brexit slide continues

Equities sank further, along with the British pound, as investors repositioned themselves amid deepening uncertainty related to the UK's choice to leave the European Union.

Europe's bank stocks plummeted another day, and relief might not be in sight. Shares of Barclays plunged 17%, while those of Royal Bank of Scotland sank 15%.

"Banking stocks will continue to struggle," Michael Hewson, a market analyst at CMC Markets in London, told Bloomberg.

"There is still a wider concern about the stability of the European banking sector. The [European Central Bank] will reiterate it remains prepared to act given any circumstances, as will central banks around the world."

Jefferies Group said Brexit "changes everything" about how investors should view Barclays, and downgraded its 2016 earnings estimate for the bank by 76%, according to the Wall Street Journal.

Meanwhile Standard & Poor's downgraded the UK's credit rating, cutting its AAA-rating by two notches to AA. It was the first time it slashed an AAA-rated sovereign credit rating by two notches at once.

S&P left the country on a negative outlook because of the risk to "economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence," according to Bloomberg.

Europe's Stoxx 600 Index finished the day with a plunge of 4.1% from the previous close. The UK's FTSE 100 index retreated 2.6%, Germany's DAX index sank 3%, while France's CAC 40 index also slumped 3%.

Dow falls 260 points
Wall Street also slid. The Dow Jones Industrial Average closed at 17,140.24, a loss of 260.51 points or 1.5%.  The Nasdaq Composite Index dropped 2.4% to 4594.44 and the Standard & Poor's 500 Index shed 1.8% to 2001.52.

The Brexit-inspired falls of the past two sessions have erased weeks of gains.

Slides in shares of American Express and those of DuPont, recently down 4.1% and 3.8% respectively, led the drop in the Dow.

Some offered a silver lining.

"The momentum has continued downward because there continues to be a lot of uncertainty," Eric Kuby, chief investment officer at North Star Investment Management in Chicago, told Reuters.

"It's important to note that it's orderly. It doesn't feel panic-inspired."

Financial stocks on Wall Street suffered, too. Shares of Bank of America were down 6.4% in late afternoon trading in New York while those of JPMorgan traded 3.6% weaker.

"This is the new normal – politics could add more volatility to all financial assets," Barbara Reinhard, head of asset allocation for multi-asset strategies at Voya Investment Management, told Bloomberg.

"This is in part because central banks have done the lion's share of lifting for stimulus."

Meanwhile, US Federal Reserve chairwoman Janet Yellen withdrew from a Wednesday panel discussion that is part of a three-day gathering by the European Central bank in Portugal, the Fed said, without offering a reason, Bloomberg reported.

In commodities, US crude oil fell ​2.7% to $US46.33 a barrel, while gold for June delivery rose 0.2% to $US1322.50 an ounce, following its biggest one-day gain since 2013.

(BusinessDesk)