Miners bear brunt as UK stocks fall again

London's FTSE 100 index fell for the first time this week on Thursday, led by a slate of companies trading ex-dividend, with sentiment again dampened by concerns over global economic growth in the wake of the coronavirus epidemic.

The blue-chip index and the mid-cap index were both down 1%. Asia-focussed bank Standard Chartered, housebuilder Persimmon, and miners BHP Group and Rio Tinto , which were all trading without dividend entitlement, dropped between 4.3% and 5.1%.

Britain's stock markets have rebounded since Monday following their worst week since the 2008 financial crisis, as early evidence of the economic hit from the outbreak spurred hopes of monetary stimulus from central banks. Signs of economic damage continues to pile up, however, with British regional airline Flybe a high profile casualty on Thursday as it shut operations just a month after a publicly-sanctioned rescue.

"There is a certain amount of fear and nervousness in the market," said Keith Temperton, a trader at Tavira Securities. A surprise interest rate cut by the U.S. Federal Reserve on Tuesday pumped yet more money into financial institutions but it also added to a growing sense of panic among investors coddled by a decade of constant stock market gains.

The IMF now predicts that global GDP could see its slowest growth since 2008-2009 this year and Deutsche Bank analysts on Thursday cut their forecast for British economic growth in 2020 to just 0.5%. Deutsche's economists outlined a range of expected official responses to the outbreak, including two cuts in interest rates by the Bank of England by May.

The market's chief fear index was up 9% at 34.91 on Thursday. "Markets might want to push for another Fed rate cut," Tavira's Temperton said. "The European Central Bank, on the other hand, doesn't have a lot of room. Once volatility markets are trading in the mid-30's, things become very speculative."

Miners, airlines and luxury goods makers were hit hard last week as the virus spread deeper in Europe and the United States and crippled supply chains and travel demand. Shares in British Airways owner IAG fell 1.9%, while EasyJet was flat. The mining index declined 4.2%, also pressured by a strong pound.

Broadcaster ITV slumped 8.6% and was on course for its worst day in over three years after it warned of lower ad revenue in April. UK outsourcer Capita Plc sank as much as 15% on signs its restructuring drive would require more capital.