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* FTSE 100 tumbles 33.5%, FTSE 250 sheds 3.9%
* Both indexes enter correction territory
* Miners, oil majors, airlines lead declines
* Rolls Royce only gainer on main index
(Adds comments, details; updates prices)
By Sagarika Jaisinghani and Devik Jain
Feb 28 (Reuters) - London's stock markets tanked on Friday,
with both benchmark indexes firmly entering correction
territory, as the coronavirus outbreak threatened to turn into a
pandemic and spark a global recession.
British Airways-owner IAG tumbled to a four-month
low after the airline said it would cut flights to Italy,
Singapore and South Korea, reflecting a collapse in passenger
numbers.
IAG's 9.2% fall pushed the stock to the bottom of the FTSE
100 and led the wider travel and leisure index down
4.7% to its lowest level since 2016.
The blue-chip FTSE 100 fell 3.5%, while the mid-cap
index shed 3.9%. Both baskets were on track for their
worst week since the 2008 financial crisis.
World stocks have been hammered across the board this week,
with the MSCI world index losing nearly $5
trillion in value, as widespread disruptions to the supply chain
prompted analysts to cut their forecasts for economic growth and
corporate earnings in 2020.
On Friday, Citigroup predicted the corporate sector would
see no earnings growth at all this year, while ratings agency
Moody's said a pandemic would trigger a global recession in the
first half of the year.
"It really does look like we have further tough times ahead
of us, growth wise," said Chris Beauchamp, chief market analyst
at IG.
"We can expect further weakness across Asia and this will
rebound to UK markets."
Bank of England chief Mark Carney said in a Sky News
interview on Thursday night that it was likely the economy would
take a hit. Traders are counting on the U.S. Federal Reserve to
cut interest rates next month to prop up growth.
London's main index has lost about 13% from a peak hit on
Feb. 12, as the virus continues to spread unchecked outside
China, the epicentre of the outbreak.
Countries on three continents have now reported new cases,
while in Europe confirmed infections in Italy reached 650 and
Germany warned of an impending epidemic.
British aerospace engineer Rolls-Royce was the only
stock in the black on the main index, rising 3.7% as its chief
executive said the company was looking forward to 2020 with some
degree of conviction and confidence.
The comments helped offset disappointing 2019 results from
the company.
Biotechnology firm Novacyt soared 19.6% after
signing its first major distribution agreement to supply its
coronavirus test to two Asian territories outside mainland
China.
Real estate agent Foxtons slipped 3.6% as its
annual adjusted core profit plunged.
(Reporting by Sagarika Jaisinghani and Devik Jain in Bengaluru;
Editing by Sriraj Kalluvila)
