UK stock rally fizzles as deaths rise; Tesco warns of surging costs

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* FTSE 100 down 1.3%, FTSE 250 slips 1.1%

April 8 (Reuters) - Britain's equity markets lost steam on Wednesday, as rising deaths globally doused hopes that the coronavirus crisis was abating, while Tesco warned of more costs due to the pandemic.

Shares in Britain's biggest retailer fell 4.7% after saying it expects to take a hit of up to 925 million pounds ($1.1 billion) and warned it was unable to give a profit forecast for this financial year.

The blue-chip FTSE 100 index fell 1.3% after closing at a near two-week high on Tuesday, while midcap shares lost 1.1% - down from a three-week high.

Insurers Aviva and Direct Line fell 8.9% and 4.9%, respectively, after they pulled their 2019 final dividends as they look to ride out the economic fallout from the pandemic. On a brighter note, healthcare company Novacyt surged 17.4% after it got a green signal for its COVID-19 diagnostic test for procurement under the World Health Organisation's (WHO) Emergency Use Listing process. (Reporting by Devik Jain and Sruthi Shankar in Bengaluru; Editing by Bernard Orr)