UK shares swing to best day since 2008 on massive stimulus plans

By Sruthi Shankar and Devik Jain

(Reuters) - The FTSE 100 saw its best day since the huge swings of the 2008 financial crash on Tuesday, retracing some of the past week's losses as massive stimulus efforts globally calmed investors amid the rapid spread of coronavirus.

The FTSE 100 index <.FTSE> jumped 9.1% after closing at a more than eight-year low in the previous session, as investors cheered the U.S. Federal Reserve's offer of unlimited expansion of asset purchases and a $2-trillion stimulus package that U.S. lawmakers are closing in on.

The upbeat global mood took over British markets despite Britain going into lockdown as the number of coronavirus deaths recorded its biggest daily jump - by 87 to a total of 422.

"The positive reaction in stock markets since the Fed's extraordinary policy announcement yesterday belies the fact that central bank actions have yet to quell the strains showing up across the global financial system," Oliver Jones, senior markets economist at Capital Economics, wrote in a note.

"It is hard to see a lasting recovery in equity prices until those strains subside."

Some of the worst-hit stocks in the recent selloff such as Carnival Corp <CCL.L> shot up 28.3% even as Carnival-owned Ruby Princess became Australia's largest source of coronavirus infections.

The commodity-heavy FTSE 100 was also boosted by a jump in oil and metal prices.

Oil majors BP Plc <BP.L> Royal Dutch Shell Plc <RDSb.L> rallied more than 20%, while the wider mining index <.FTNMX1770> rose 16%, led by BHP Group <BHPB.L>, Rio Tinto <RIO.L> and Anglo American Plc <AAL.L>.

UK midcap shares <.FTMC> also rose 8.4%.

However, both the blue-chip and the midcap indexes was set for their worst month in over three decades as more companies issued profit warnings, cut costs and flagged concerns over rising debt.

Home furnishings retailer Dunelm Group <DNLM.L> said it would draw down all its available credit and cancel interim dividend payment due to the coronavirus pandemic.

Hotel operator Whitbread <WTB.L> suspended shareholders' dividends and said it would immediately shut all its hotels and restaurants.

Britain's biggest sportswear retailer JD Sports <JD.L> rose 19% as it delayed the publication of financial results to May, but said it has enough cash to ride out the coronavirus crisis.

Investors looked past latest data that showed Britain's economy was shrinking at a record pace, faster than during the 2008-09 financial crisis.

The flash composite PMI sank to 37.1 from 53.0, its lowest since the survey started in January 1998 and below all forecasts in a Reuters poll of economists.

(Reporting by Sruthi Shankar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta, Arun Koyyur and Angus MacSwan)