* BP, Shell among the biggest drags on the FTSE 100
* Melrose Industries bottoms out FTSE 100 after quarterly
loss
* DIY group Kingfisher marks best day in 34 years
(Updates to close)
By Sagarika Jaisinghani and Ambar Warrick
July 22 (Reuters) - London's blue-chip index sank on
Wednesday with energy and healthcare stocks weighing the most
amid weaker oil prices and some unwinding of bets on the
timeline of a coronavirus vaccine.
The FTSE 100 was down 1%, with oil heavyweights BP
PLC and Royal Dutch Shell among the top drags as
oil prices plummeted on a surprise rise in inventories.
Losses on the export-heavy FTSE 100 were more pronounced
than those on the domestically-inclined midcap index,
owing to recent strength in the pound.
Drugmaker AstraZeneca also weighed, retreating
further from record-high levels after the lead developer of its
vaccine expressed caution on Tuesday about when it could be
rolled out.
Turnaround specialist Melrose tumbled 14% to the
bottom of the FTSE 100 as it signalled it could cut jobs to
combat the coronavirus-led downturn.
Sentiment was also dampened by a surge in global coronavirus
cases past 15 million. Local stocks extended losses toward the
end of the session, tracking a mixed open on Wall Street, though
markets were watching for new U.S. stimulus measures.
"It's a pause before you find out what's next around the
corner, (and eyes are now on) the United States to get some sort
of extra stimulus package for that next leg higher," said David
Madden, analyst at CMC Markets in London.
The FTSE 100 has rebounded sharply from a coronavirus-driven
crash in March, but gains have slowed since May due to concerns
over how a post-COVID-19 economic recovery will play out.
A Reuters poll found Britain's economy is expected to expand
at its quickest pace in decades in the third quarter following a
record plunge in the previous quarter, but a majority of the
respondents said the outlook had not improved.
In domestic earnings-driven news, home improvement retailer
Kingfisher marked its best day since 1986, topping the
FTSE 100 after it forecast a rise in underlying first-half
profit.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Subhranshu Sahu and Mark Heinrich)
