LONDON: UK shares eased on Monday as concerns surrounding Britain's vote on European Union membership weighed on European markets, though Britain's blue-chip FTSE 100 outperformed as leading investment banks remained "overweight" UK equities.
Despite the implied probability of a British vote to stay in the European Union falling to 68.5 percent on Monday, according to betting odds supplied by Betfair, Britain's FTSE 100 index was down only 0.4 percent at 6,092.84 points by 0826 GMT, outperforming the broader European market.
Both Deutsche Bank and JP Morgan said that they are remining overweight UK equities even as worries about Britain's June 23 vote have intensified volatility across world markets.
"In the case of a 'Leave' vote in the UK referendum ... we expect UK equities to outperform the European market, given the likely GBP (British pound) depreciation in such a scenario as well as the market's defensive sector structure," Deutsche Bank strategists said in a note.
The FTSE 100 index has notably outperformed Europe so far this year, down only around 2 percent while the pan-European FTSEurofirst 300 has fallen around 10 percent so far in 2016.
While the losses on the FTSE 100 were broad-based, financial stocks were among the top fallers, with Lloyds and Barclays down 2.1 percent and 1.7 percent respectively, with analysts citing concerns for the sector remaining in a low interest rate environment.
Telecoms company BT Group also fell, down 1.6 percent after Berenberg cut its price target on the stock.
Among the mid-caps, G4S dropped 6.4 percent in the wake of the of Sunday's Orlando nightclub shootings which were carried out by one of the global security firm's employees.
"(There are) definitely some question marks over their hiring practices and maybe their wider business practices ... If (G4S is) in the spotlight, then that risks future contracts for them in the U.S.," Jasper Lawler, market analyst at CMC Markets, said.
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