UPDATE 2-London stocks hit by fears of coronavirus economic impact

* FTSE 100 tumbles 3.4%, FTSE 250 sheds 2.1%
* Both indexes enter correction territory
* Miners, oil majors, airlines lead declines
* Rolls Royce only gainer on main index

(Updates to closing prices)
By Sagarika Jaisinghani and Devik Jain
Feb 28 (Reuters) - London's FTSE 100 dropped to its lowest
level since June 2016 on Friday as investor fears that the
coronavirus outbreak could spark a global recession intensified.
The blue-chip FTSE 100 .FTSE fell 3.4%, while the mid-cap
index .FTMC shed 2.1%. Both marked their worst week since the
2008 financial crisis.
British Airways-owner IAG ICAG.L fell 9% to a four-month
low after it said it would cut flights to Italy, Singapore and
South Korea, reflecting a drop in passenger numbers.
The fall pushed the stock to the bottom of the FTSE 100 and
led the wider travel and leisure index .FTNMX5750 down 3.3% to
its lowest level since 2016.
World stocks have been hammered across the board this week,
with the MSCI world index .MIWD00000PUS losing about $6
trillion in value, as widespread disruptions to the supply chain
prompted analysts to cut their forecasts for economic growth and
corporate earnings in 2020. MKTS/GLOB
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 governor Mark Carney told Sky News on
Thursday 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 coronavirus continues to spread 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 RR.L was among a
handful of stocks in the black on the main index, rising 4% as
its chief executive said the company was looking forward to 2020
with some degree of conviction and confidence. This helped offset disappointing 2019 results. Biotechnology firm Novacyt NCYT.L soared 30% after signing
its first major distribution agreement to supply its coronavirus
test to two Asian territories outside mainland
China.