March 2, 2020 / 8:46 AM / a month ago

London stocks rebound as investors bet on central bank stimulus

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* FTSE 100 up 1.7%, FTSE 250 adds 2%

March 2 (Reuters) - London-listed shares bounced back on Monday as investors hoped of further monetary stimulus from central banks to mitigate the economic impact of the coronavirus epidemic.

The blue-chip FTSE 100 gained 1.7%, while the mid-cap index was up 2%. Oil majors BP Plc and Royal Dutch Shell Plc added 4% each, tracking oil prices, and were the biggest boosts to the FTSE 100.

Both benchmark indexes had closed on Friday with their biggest weekly declines since the 2008 financial crisis as the outbreak threatened to blow into a global pandemic and cripple supply chains.

Investors now expect central banks around the world to launch a coordinated effort to cut interest rates and shore up growth. Bets of the U.S. Federal Reserve reducing rates this month stand at 100%, according to CME Group’s FedWatch tool.

Miners, airlines and luxury goods makers, which were among the worst hit sectors last week, were up between 1.6% and 2.4%.

Investor attention in Britain will also turn to fresh Brexit negotiations, starting Monday, that aim to hammer out a trade deal by the end of the year to govern everything from aviation to fisheries and student exchanges. (Reporting by Sagarika Jaisinghani and Shivani Kumaresan in Bengaluru; Editing by Vinay Dwivedi)

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