UPDATE 2-London stocks rebound as investors bet on central bank stimulus

* BP , Shell lead gains as supply cut hopes boost oil prices
* Miners rise; interest-rate sensitive banks, airlines
decline
* FTSE 100 up 1.1%, FTSE 250 falls 0.2%

(Adds stock close)
By Devik Jain and C Nivedita
March 2 (Reuters) - London-listed shares bounced back in
choppy Monday trade from their worst week since the global
financial crisis, as investors bet on further monetary stimulus
from central banks to limit the economic impact of the
coronavirus epidemic.
The blue-chip FTSE 100 .FTSE closed up 1.1%, after falling
to its lowest level since 2016 on Friday, while the mid-cap
index .FTMC ended a volatile day of trading 0.2% lower
London's main index was pushed higher by supermarket firms
Ocado OCDO.L , Sainsbury's SBRY.L and Morrisons MRW.L after
Ocado advised customers to place orders further in advance
because of "exceptionally high demand", indicating a possible
reaction from shoppers to the spreading coronavirus outbreak.
British Prime Minister Boris Johnson said the country needed
to be prepared for the coronavirus to spread further and would
announce its main action plan for responding to the outbreak on
Tuesday. The bluechip index was also boosted by oil majors BP Plc
BP.L and Royal Dutch Shell Plc RDSa.L as hopes of a supply
cut boosted oil prices. O/R
Miners .FTNMX1770 and luxury goods makers .FTNMX3760
rose between 3% and 2.4%, after being hit last week in a
worldwide sell-off that erased more than $5 trillion from equity
markets. MKTS/GLOB
But interest-rate sensitive banks .FTNMX8350 lagged the
wider rally on Monday, as investors expected central banks to
slash rates after data showed China's factory activity being
battered by the health crisis, which has infected more than
87,000 people and killed more than 3,000. "Equity markets have become overly dependent on central
banks coming in anytime things look a bit shaky and essentially
throwing money at the problem - cutting interest rates,
government bond buying schemes," CMC Markets analyst David
Madden, said.
"If we have a health crisis whereby people, towns, cities
are locked out or in quarantine, how is an interest rate cut
really going to encourage people to go out and borrow and spend
more money?" he added.
The CME Group's FedWatch Tool now assigns a 100% chance that
the Fed will lower borrowing costs at its two-day meeting
concluding on March 18.
Airlines .FTNMX5750 fell 1.9%, while car and auto parts
firms .FTNMX3350 ended the day 8.31% lower as dealers took the
view that travel would be greatly diminished on account of the
coronavirus taking hold in Europe.
British Airways-owner IAG ICAG.L fell 8.2%.
In news-driven moves, mid-cap firm Senior SNR.L , a
supplier to Boeing BA.N jumped 4.9% after saying it was taking
firm action to restructure its business and ensure a return to
growth in 2021. Insurer Hiscox HSX.L rose 4% after it said it had received
small claims related to the outbreak as a pandemic is only
covered in a very small part of its portfolio. Drugmaker Hikma Pharmaceuticals HIK.L rose 6.2% after
Barclays BARC.L raised its price target.