GLOBAL MARKETS-Banks pull stocks lower as Brexit continues global rout

* U.S (Other OTC: UBGXF - news) . stocks track Europe lower on Brexit concerns

* Brexit fallout crushes financial stocks

* Treasuries, dollar index lifted in scramble to safe-haven assets

* Sterling hits 31-year low on Brexit vote aftermath (Adds U.S. market open, byline, dateline, updates prices and adds commentary)

By Hilary Russ

NEW YORK, June 27 (Reuters) - Britain's shock vote to leave the European Union roiled global markets for a second day on Monday, hammering U.S. and European banks, lifting bond and gold prices, and dragging the British pound to a 31-year low.

U.S. stocks opened sharply lower, following European markets, pulled down by financial stocks amid uncertainty over London's future as the region's financial capital.

The S&P financial index fell 2.5 percent. JPMorgan was down 3.3 percent while Bank of America (Swiss: BAC.SW - news) was down 5.3 percent.

The Dow Jones industrial average fell 295.06 points, or 1.7 percent, to 17,105.69, the S&P 500 lost 39.83 points, or 1.95 percent, to 1,997.58 and the Nasdaq Composite dropped 110.39 points, or 2.34 percent, to 4,597.59.

An index of European bank shares fell 8.89 percent. Royal Bank of Scotland (LSE: RBS.L - news) fell 16 percent while Barclays (Swiss: BARC.SW - news) shed 18 percent.

Italian banks also suffered. UniCredit (EUREX: DE000A163206.EX - news) fell more than 9 percent. The government was looking at options to help its banks and prevent further share price falls.

European stocks took a beating for a second day, down 3.7 percent. Banks at a seven-year low helped push London's top share index down by 2.5 percent.

British finance minister George Osborne sought to reassure markets, saying the world's fifth-largest economy was strong enough to cope with the Brexit-inspired volatility, but the positive impact on sterling was only fleeting.

MSCI (NYSE: MSCI - news) 's all-country world stock index fell 2 percent.

"There is a crisis of confidence in the markets," said Todd Morgan (Other OTC: MGHL - news) , Chairman at Bel Air Investment Advisors in Los Angeles. "But there is a lot of cash lying around and interest rates are low, the world will survive."

Yields on core government debt fell again. German 10-year bond yields, the benchmark for euro zone borrowing costs, fell as low as minus 0.11 percent but held above Friday's record low of almost minus 0.17 percent.

In the scramble for safe-haven assets, benchmark U.S. Treasury yields hovered near four-year lows. The 10-year note fell nearly 11 basis points to 1.47 percent.

"The U.S. remains a very powerful place where people can find a safe haven. Foreigners are also getting a kick with the rise in the dollar," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.

Sterling fell more than 3.65 percent to $1.310, surpassing its Friday low as yields on 10-year British government debt fell below 1 percent for the first time.

"Uncertainty equals currency weakness, we know this, and there is no sense that this (sterling) is a value trade right now and that you have to get back in. It (Other OTC: ITGL - news) is too early for anyone to start calling a bottom," said Neil Mellor, a currency strategist at Bank of New York Mellon in London.

The euro, also seen vulnerable to the exit from the EU of its second-largest economy, fell 1.2 percent to as low as $1.098. The yen firmed as high as 101.52 per dollar.

The dollar index, which tracks the greenback's value against six currencies, was up 1 percent.

The rallying dollar helped drag oil prices down. Brent crude dropped more than 2 percent to $47.35 before 12 noon EDT (16:00 GMT), while U.S. crude slipped $1.12 to $46.52.

Brent and U.S. crude futures have lost about 7 percent since Thursday's settlement in the rush away from global risk assets.

(Aditional reporting by Yashaswini Swamynathan in Bengaluru, Richard Leong and Barani Krishnan in New York, Hideyuki Sano in Tokyo, Nichola Saminather in Singapore, Patrick Graham, Alistair Smout and Dhara Ranasinghe in London; Editing by Toby Chopra and Nick Zieminski)