UPDATE 2-FTSE 100 rises after BoE's new rescue measures, midcaps stuck in the red

  • Reuters
  • Stock Market News
UPDATE 2-FTSE 100 rises after BoE's new rescue measures, midcaps stuck in the red
Credit: © Reuters.

* FTSE bounces after BoE eases again

* Recent sterling slide helps exporters, banks also gain

* Joules, Playtech, Crest Nicholson scrap dividend

* FTSE 100 up 1.4%, FTSE 250 down 1.4% (Updates with closing prices)

By Sruthi Shankar

March 19 (Reuters) - Britain's top shares ended a volatile session higher on Thursday after the Bank of England cut interest rates to a record low and ramped up its bond-buying programme in a bid to rescue the economy from the coronavirus crisis.

After wild swings earlier in the day, the blue-chip FTSE 100 .FTSE rose 1.4%, with big dollar earners such as Diageo DGE.L , Royal Dutch Shell RDSa.L and AstraZeneca AZN.L providing the biggest boost, even as the pound recovered from a 35-year low. GBP/

The central bank cut interest rates to 0.1%, its second emergency rate cut in just over a week, and promised 200 billion pounds of additional bond purchases, and at a much faster pace than normal. moves follow similar drastic measures by other central banks and governments, including a 330 billion-pound stimulus package from the UK government earlier this week, to inject liquidity into markets and stem an economic slowdown, which many fear may have already pushed the global economy into a short slump. would not be surprised if the BoE's announcement prepares the ground for more fiscal announcements soon," Citigroup (NYSE: C )'s Christian Schulz wrote in a note.

"We expect further programmes to absorb households' income losses due to the COVID-19 crisis and eventually also stimulus and debt forgiveness for companies."

The announcement, however, failed to pull midcap stocks out of their misery. The FTSE Mid 250 index .FTMC dropped 1.4% for its eleventh day of losses after Prime Minister Boris Johnson enforced tougher measures to contain the virus. (stimulus measures) will help at the margin, particularly the fiscal spend, if they can find a way to get the money to businesses and individuals," a fund manager at a UK- based asset manager said.

"For confidence to meaningfully turn more positive, we need to see the rate of infection slow in Western markets."

Shares in homebuilder Crest Nicholson CRST.L slumped 30% after it cancelled payment of its final dividend along with financial forecasts for 2020. retailer Joules Group JOUL.L and gambling software maker Playtech PTEC.L also announced similar measures. leading ventilator manufacturer, Hamilton Medical, told Reuters that Britain faces a "massive shortage" of the ventilators that will be needed to treat critically ill patients suffering from coronavirus. brand Burberry Group BRBY.L warned that sales in the final weeks of March would plunge by around 70% to 80% compared to last year. operator Young & Co's Brewery Plc YNGa.L fell 5.2% after it said that the closure of some or all of its pubs for at least a short period was "imminent". NXT.L rose 5.3% after the clothing retailer said it could sustain a hit from the coronavirus outbreak of more than 1 billion pounds ($1.2 billion) without exceeding its debt and bank facilities.

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