* BOE cuts rates by 50 basis points
* G4S second-biggest loser on midcap index
* Travel and leisure stocks drop (Updates to close)
By Shivani Kumaresan and C Nivedita
March 11 (Reuters) - London stocks gave up early gains on Wednesday as investors doubted whether a Bank of England rate cut and a 30 billion-pound ($39 billion) economic stimulus plan would be enough to counter the shock from the coronavirus outbreak.
The central bank cut rates by 50 basis points to a record low of 0.25%, following a similar move from the U.S. Federal Reserve last week and announced support for bank lending, which initally lifted the London stocks.
“Trying to solve a debt crisis by encouraging more borrowing has perhaps kept the plates spinning for a bit longer but it has not provided a sustainable base for the real economy or financial markets,” said Russ Mould, AJ Bell investment director.
The FTSE 100 closed down 1.6%, extending a slump into a fifth day, with the travel and leisure index clocking the biggest fall. The FTSE mid 250 index fell 1.2%.
The food and drug retailers index and the general retailers index slid about 3%.
Britain also launched the stimulus plan as new finance minister Rishi Sunak, presenting his budget statement to parliament, said the economy faced a “significant impact” from the spread of the virus, even if it was likely to be temporary.
“The primary effects of the coronavirus outbreak have so far been to reduce supply by keeping people off work and disrupting supply chains – which means monetary policy isn’t the ideal tool, but a rate cut can help support demand and take some pressure off small businesses,” said Hargreaves Lansdown equity analyst William Ryder.
“This isn’t a silver bullet, and won’t stop the spread of the coronavirus, get sick people back to work or fix broken supply chains – but it’s something – in fact it’s almost everything the bank has – although they’re yet to extend QE.”
On Tuesday, Junior Health Minister Nadine Dorries tested positive for coronavirus, which has so far infected 456 people and killed six in Britain.
Second biggest loser on mid-cap index, G4S, one of the world’s largest private security firms, fell 22.6% after posting an annual statutory loss as it took a charge related to its UK cash business.
Car dealership Lookers sank 32.7% after it identified potentially fraudulent transactions in one of its operating divisions and postponed its annual results until the second half of April. (Reporting by Shivani Kumaresan and C Nivedita in Bengaluru; Additional reporting by Sruthi Shankar and Devik Jain; Editing by Bernard Orr and Alison Williams)