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* FTSE 100 ends 2.6 pct lower, mid-cap index falls 7 pct
* UK banks index hits seven-year low, Barclays down 17 pct
* Travel stocks, housebuilders among worst hit
* Gold miners rally, Fresnillo touches three-year high
By Atul Prakash
LONDON, June 27 (Reuters) - Britain's top share indexextended the previous session's steep losses on Monday as thecountry's vote last week to leave the European Union hurled itinto political and economic uncertainty, hitting banks,housebuilders and airlines hard.
Some investors took refuge in firms producing gold, seen asa safe-haven asset, with Fresnillo closing up 7 percentafter hitting a three-year high and Randgold Resources gaining 9 percent.
The FTSE 100 ended 2.6 percent lower at 5,982.20points, taking total losses to 5.6 percent in two sessions andwiping off nearly 100 billion pounds ($132 billion) since thereferendum results early on Friday. Shares in easyJet recorded their biggest one-day percentage drop in 12 years.
The domestically-focused mid-cap index lost nearly 7percent after reaching its lowest since late 2014 followinggrowing concerns about the country's growth and earnings outlookafter the poll outcome.
"These uncertainties pose significant risks for theinvestment outlook," said Larry Hatheway, chief economist andhead of multi-asset portfolio solutions at GAM.
"Against the backdrop of an already slowing UK economy,Brexit anxiety could precipitate a large enough reduction inconsumer and business spending to tip the UK economy intorecession."
British financial stocks declined the most, with the sectorindex ending 7.3 percent weaker after a seven-yearlow. Royal Bank of Scotland and Barclays dropped 15 percent and 17.3 percent respectively, also hit bybroker downgrades and by JP Morgan's cutting its rating on alldomestic banks.
The mid-cap bank Shawbrook plummeted 30 percent.
"The UK's vote to leave the EU will drive tectonic plateshifts in European bank investing. We move to a slowgrowth/modestly recessionary scenario for UK banks," analysts atJefferies said in a note, downgrading RBS to "hold" and Barclaysto "underperform".
Investors seemed to ignore finance minister George Osborne'sassertion on Monday that the British economy remained strong,his first public statement on the Brexit vote.
Shares in easyJet slumped 22.3 percent to athree-year low after it issued a third-quarter profit warning.British Airways owner IAG fell 15.9 percent, also afterGoldman Sachs cut its shares to "neutral".
"A vote by Britain to leave the EU can hardly help a companylike easyJet, particularly seeing as the fall in the pound willput Britons off travelling overseas. Rain, strikes and theimpact of the EU referendum have all damaged profits," saidNicholas Hyett, equity analyst at Hargreaves Lansdown.
Housebuilders also fell sharply, with Taylor Wimpey,Persimmon and Barratt Developments all down13.8 to 19.4 percent. ($1 = 0.7572 pounds)
(Additional reporting by Kit Rees)
