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* FTSE 100 rises 1.5%, FTSE 250 0.3%
* Consumer staples lead gains
* Airlines lag broader rally as virus fears hit travel
demand
* Mall operator Intu hits record low
(Adds FTSE close, news items)
By Devik Jain and Noor Zainab Hussain
March 4 (Reuters) - London's blue chip index completed a
hat-trick on Wednesday, as investors bet on possible rate cuts
in Europe after the U.S. Federal Reserve's emergency move to
protect the U.S. economy from the impact of the coronavirus on
Tuesday.
The FTSE 100 index rose as miners and other export-heavy
firms were also boosted by a dip in sterling.
The index closed the session 1.5% higher, led by
gains for consumer staples including Reckitt Benckiser,
Morrison and Imperial Brands. The domestically
focussed mid-cap index was 0.3% higher.
The mining index rose 1.9%, while the auto
and pharma sectors were up between
4.2% and 3.7%.
Luxury goods makers recovered after being hit
hard last month by fears of widespread disruption to supply
chains as the virus spread rapidly outside China.
"Even a consideration that maybe the glass is not empty but
more akin to being half-full boosts risk assets such as the
equity markets which - on a yield basis - look highly attractive
versus investment alternatives," Chris Bailey, European
Strategist at Raymond James, said.
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.
"The positive move has been influenced by speculation that
we might see interest rate cuts from the Bank of England as well
as the European Central Bank in the near-term," CMC Markets
analyst David Madden said.
"In light of the Fed’s emergency rate cut yesterday, the
chatter about other central banks cutting too is likely to do
the rounds for a while," he said.
Airline stocks including British Airways-owner IAG
fell 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, shopping centre owner Intu
slumped 40.9% 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 8.2% 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 and C Nivedita in
Bengaluru; editing by Patrick Graham and Elaine Hardcastle)
