UPDATE 3-London stocks fall despite UK rate cut and budget boost

  • Reuters
  • Stock Market News
UPDATE 3-London stocks fall despite UK rate cut and budget boost
Credit: © Reuters.

* BOE cuts rates by 50 basis points

* G4S (CSE: G4S ) second-biggest loser on midcap index

* Travel and leisure stocks drop (Updates to close)

By Shivani Kumaresan and C Nivedita

March 11 (Reuters) - London stocks gave up early gains on Wednesday as investors doubted whether a Bank of England rate cut and a 30 billion-pound ($39 billion) economic stimulus plan would be enough to counter the shock from the coronavirus outbreak.

The central bank cut rates by 50 basis points to a record low of 0.25%, following a similar move from the U.S. Federal Reserve last week and announced support for bank lending, which initally lifted the London stocks. to solve a debt crisis by encouraging more borrowing has perhaps kept the plates spinning for a bit longer but it has not provided a sustainable base for the real economy or financial markets," said Russ Mould, AJ Bell investment director.

The FTSE 100 .FTSE closed down 1.6%, extending a slump into a fifth day, with the travel and leisure index .FTNMX5750 clocking the biggest fall. The FTSE mid 250 index .FTMC fell 1.2%.

The food and drug retailers index .FTNMX330 and the general retailers index .STNMX5370 slid about 3%.

Britain also launched the stimulus plan as new finance minister Rishi Sunak, presenting his budget statement to parliament, said the economy faced a "significant impact" from the spread of the virus, even if it was likely to be temporary. primary effects of the coronavirus outbreak have so far been to reduce supply by keeping people off work and disrupting supply chains – which means monetary policy isn't the ideal tool, but a rate cut can help support demand and take some pressure off small businesses," said Hargreaves Lansdown (LON: HRGV ) equity analyst William Ryder.

"This isn't a silver bullet, and won't stop the spread of the coronavirus, get sick people back to work or fix broken supply chains – but it's something – in fact it's almost everything the bank has – although they're yet to extend QE."

On Tuesday, Junior Health Minister Nadine Dorries tested positive for coronavirus, which has so far infected 456 people and killed six in Britain. biggest loser on mid-cap index, G4S GFS.L , one of the world's largest private security firms, fell 22.6% after posting an annual statutory loss as it took a charge related to its UK cash business. dealership Lookers LOOK.L sank 32.7% after it identified potentially fraudulent transactions in one of its operating divisions and postponed its annual results until the second half of April.

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