* FTSE 100 rises 0.9%, FTSE 250 slightly higher
* Miners Rio Tinto, Antofagasta, Anglo American lead gains
* Airlines lag broader rally as virus fears hit travel
demand
* Mall operator Intu hits record low
(Adds comments, details; updates prices)
By Devik Jain
March 4 (Reuters) - London's FTSE 100 index rose for a third
day on Wednesday, as miners and other export-heavy firms were
boosted by a dip in sterling, with investors weighing the impact
of a cut in U.S. interest rates on a slowing global economy.
The blue-chip index rose 0.9%, led by gains for Rio
Tinto, Antofagasta and Anglo American.
The domestically focussed mid-cap index was slightly
higher.
The mining index rose 3%, while the oil and gas
sector was up 0.9%.
Those sectors, along with luxury goods makers,
have recovered after being hit hard last month by fears of
widespread disruption to supply chains as the virus spread
rapidly outside China.
Chinese factory and services activity contracted sharply in
February, and central banks around the world are scrambling to
come up with ways to contain the hit to growth.
In its first such move since the global financial crisis in
2008, the U.S. Federal Reserve unexpectedly lowered borrowing
costs by 50 basis points on Tuesday, setting the stage for its
European peers to follow suit.
Many on Wall Street, however, read that as a sign of panic
and worse things to come, sending U.S. markets tumbling.
"We do expect more central bank easing; we expect it in the
UK and Europe as well as a further rate cut in the U.S.," said
Simona Gambarini, markets economist at Capital Economics in
London.
"Having said that, the stock market only recovers (from
epidemics) when the pace of new cases peaks, which might be some
time away for some countries. So despite the monetary easing, we
might not see a recovery in the stock market until then."
London's benchmark FTSE 100 is still in correction
territory, implying a fall of 10% from a recent peak.
Gains on the index on Wednesday were capped by airline
stocks including British Airways-owner IAG, as the
virus continued to spread in over 80 countries.
The wider travel and leisure sub-sector has now
fallen in eight of the past nine sessions.
Among individual stocks, mall operator Intu
slumped 30.1% to a record low as it scrapped a planned equity
raise and said there was a risk that it might breach some of its
debt covenants this year.
Sausage-skin maker Devro gained 3% after saying its
China manufacturing plant was operating at normal capacity and
had not faced labour or supply shortages due to the health
crisis.
(Additional reporting by Shivani Kumaresan in Bengaluru;
editing by Patrick Graham and Sagarika Jaisinghani)
