UPDATE 2-Shell's historic dividend cut drags FTSE 100 lower

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* FTSE 100 down 3.5%, FTSE 250 drops 2.3%

* Shell slumps after cutting dividend by 65%

* Reckitt Benckiser rises after record sales
(Updates with market closing)

By Devik Jain and Sagarika Jaisinghani

April 30 (Reuters) - An 11% plunge in the shares of oil
giant Royal Dutch Shell knocked UK's FTSE 100 lower on
Thursday, after the company cut its dividend for the first time
since World War Two to cope with the fallout of the coronavirus
crisis.

The internationally focused FTSE 100 fell 3.5%, with
the energy sector proving the biggest drag, taking 65 points off
the index.

Shares in rival BP, which said it was maintaining its
dividend earlier this week, fell 6%. Shell also suspended share
buybacks and said it would reduce output by about a quarter, hit
by a slump in oil demand due to tight lockdown measures.

"Shell's decision is devastating to investors across the
country as so many people own its shares directly or through
their pension," Russ Mould, investment director at AJ Bell,
wrote in a client note. "Shell's actions could also lead to BP
potentially reassessing its position in the near future."

Markets across the globe took a breather on Thursday after a
recent run of gains that helped the FTSE 100 post its biggest
monthly gain since April 2018 with a 4% rise.

The FTSE midcap index, down 2.3% on the day, still
recorded its biggest monthly gain since 2010.

That came on the back of signs that several economies were
restarting after coronavirus-induced lockdown and aggressive
stimulus actions by central banks and governments globally.

British Prime Minister Boris Johnson said he would set out a
comprehensive plan next week on how to start re-opening the
economy as Britain had passed through the peak of COVID-19
infections.

However, a batch of weak earnings reports added to the gloom
for London stocks.

Lloyds Banking Group fell 7.3% as its first quarter
pretax profit was wiped out by provisions against expected bad
loans due to the pandemic.
Miner and trader Glencore dropped 5% after it cut
its 2020 capital expenditure and output targets to reflect the
impact of the coronavirus on its operations.

Supermarket group Sainsbury's also fell 5% after it
warned of a hit from coronavirus-related costs and said it would
defer dividend payment decisions until later in the
year.

Among the gainers, Reckitt Benckiser rose 3.6% after
it forecast performance in 2020 to be better than initially
thought and posted a record sales growth in the first quarter
due to panic buying ahead of lockdown.

Drugmaker AstraZeneca gained 1.4% after saying that
it would team up with the University of Oxford to help develop,
produce and distribute a potential COVID-19 vaccine.
(Reporting by Devik Jain, Sagarika Jaisinghani and Sruthi
Shankar in Bengaluru; editing by Larry King and Andrew Heavens)