Milan, Madrid stocks set for biggest fall ever after Brexit shock

Britain's shock decision to leave the European Union has reawakened concerns of ripple effects on the European continent, with some investors pointing to Italy as the next risk to watch, while Spain was due to hold a general election on Sunday.

"In our view, the next big test for the EU will be the Italian referendum on the constitutional reform in October," Exane analysts said, noting how populist eurosceptic parties like the Five Star movement are increasingly popular in Italy.

By 0924 GMT, Milan's FTSE MIB <.ftmib> index was down 9.4 percent Spain's ibex <.ibex> fell more than 10 percent, both weighed down by steep losses among banking stocks.

(Reporting by Danilo Masoni; Editing by Vikram Subhedar)