Shares in EasyJet fall as much 6 percent, making the budget airline the biggest loser in the FTSE's mid-cap index, after it said late on Friday founder Stelios Haji-Ioannou stepped down from the board and concerns over the ash cloud causing further disruption dent confidence.
'There is considerable downside risk in the short-term following the resignation of Stelios and his comments on strategy,' say analysts at Deutsche Bank.
Haji-Ioannou, widely known as Stelios, said on Friday he planned to lead a shareholder revolt against the board's plans to increase the size of its fleet.
The broker says the discord between the founder and the board is unsettling and the company faces further risks from airspace closures, rising fuel costs and a court case with Stelios over the brand licence.
Shares in EasyJet were down 5.7 percent at 392 pence, underperforming the the DJ Stoxx pan-European Travel and Leisure index which was down 0.7 percent.
Shares in Barclays, Lloyds Banking Group and Royal Bank of Scotland fall 0.4 to 2.1 percent as JP Morgan says it sees the three UK banks being impacted most from potential changes to provisioning requirements.
JP Morgan says, it estimates UK banks will need to increase reserve levels by 36.7 billion -- 42 percent of the European banks total of 87 billion pounds -- from 2009 levels, if the International Accounting Standards Board proposal for banks to take a provision when a loan is originated, rather than only when there is evidence of impairment, comes to fruition.
The broker says the move will impact the banks' return on net asset value more than their European peers.
JP Morgan retains its 'underweight' stance on Lloyds and RBS, and 'neutral' rating on Barclays, but says HSBC and Standard Chartered, up 0.6 and 1.9 percent respectively, should perform better and therefore keeps its 'overweight' on the two more Asia-focused banks.
Shares in BP gain 2 percent after the energy giant says it made some progress to contain oil leaking in the Gulf of Mexico, its first success at controlling the flow of oil into the sea since an explosion on April 20 ruptured a well.
'It's going to be seen as good news. They haven't controlled it but it looks like they're gradually getting things under control,' says Panmure Gordon analyst Peter Hitchens.
He says that BP will outperform the market on Monday.
'It's not the happiest of markets, the oil price is off and the market is down so it should perform well relative to the markets.'
Shares in the oil major are up 2.1 percent at 541.3 pence, outperforming a flat FTSE 100 index.
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