UPDATE 2-UK stocks underperform Europe as virus woes persist

* FTSE 100 down 0.9%, FTSE 250 drops 2.0%
* BAT slumps on U.S. criminal probe reports
* Astrazeneca up on update on possible COVID-19 drug
* Cineworld down on report lenders may block Cineplex
takeover

(Updates with closing price)
By Devik Jain and Sruthi Shankar
April 14 (Reuters) - UK equities sat out a global stock
market surge on Tuesday, as declines in oil majors and British
American Tobacco added to gloom following signs that Britain
will remain under lockdown for a longer period.
The blue-chip FTSE 100 index .FTSE ended 0.9% lower as the
UK government signalled there would be no easing of lockdown
measures this week after the death toll from COVID-19 infection
rose past 12,000. Meanwhile, independent budget forecasters said the UK
economy could shrink by 35% in the April-June period, and the
unemployment rate could more than double to 10% due to the
government's coronavirus shutdown. Housebuilders, travel stocks and advertising companies were
among the biggest decliners, while BP BP.L and Royal Dutch
Shell RDSa.L dragged the FTSE 100 lower as oil prices slumped
5%. O/R
Stock markets elsewhere in Europe and Wall Street jumped
amid talks of certain economies gradually reopening after
weeks-long lockdown even as big U.S. banks JPMorgan JPM.N and
Wells Fargo WFC.N set aside billions of dollars to cover
potential loan losses stemming from the pandemic. .EU .N
Shares in Royal Bank of Scotland RBS.L , Lloyds Banking
Group LLOY.L and Barclays BARC.L fell between 4% and 6%.
"Many investors are eyeing April as potentially the last
major month of pain for Europe and Asia," said Edward Moya,
senior market analyst at Oanda, New York. "The UK is still
seeing news cases and the death toll rise, so expectations could
be higher for a slightly slower start than France."
With billions of dollars injected into Britain's economy
through fiscal and monetary measures, the FTSE 100 has recovered
nearly 18% from its March 16 low, but stands down about 25% from
its January peak.
Companies listed on the pan-European STOXX 600 .STOXX are
expected to report an average 22% decline in earnings in the
first quarter, and a 34.2% slump in the second quarter,
according to Refinitiv data. Equity strategists at JPMorgan Cazenove wrote in a client
note that the drastic cuts to dividends among UK companies this
year put the region at a risk of outflows.
"Historically, one of the key attractions of the UK has been
its high dividend yield. More than 40% of dividend cuts in
Europe this year are by UK companies," they said.
BAT shares BATS.L shed 3.4% after a newspaper report that
the company is under a criminal investigation by U.S. regulators
over suspected sanctions-busting. The domestically focused midcap index .FTMC fell 2%, with
cinema operator Cineworld CINE.L tumbling 18.4% after a report
its lenders were exploring legal challenge to block the takeover
of Canadian rival Cineplex. Among gainers, AstraZeneca AZN.L surged 6.8% after saying
it would start a clinical trial of its cancer drug Calquence to
assess its potential in the treatment of the exaggerated immune
response associated with COVID-19 infection in severely ill
patients. Clothing retailer Next NXT.L rose 2.5% as it hit a
self-imposed daily limit within hours of re-opening its online
business.