UPDATE 2-UK mid-caps rise for third day on bets of recovery

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* Insurer Beazley jumps on capital increase
* Surge in UK jobless claims to 1996-highs tempers optimism
* Caterer Compass Group slides on new share placement
* FTSE 100 off 0.8%, FTSE 250 adds 0.6%

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By Shreyashi Sanyal
May 19 (Reuters) - Britain's mid-cap index climbed for the
third straight session on Tuesday on hopes of a speedy recovery
from a coronavirus-fuelled recession, while more UK firms moved
to shore up cash reserves to ride out the slump.
The domestically focussed FTSE 250 .FTMC rose 0.6%,
boosted by digital payments solutions provider Network NETW.L
which jumped 9.4% after Morgan Stanley raised its rating to
"overweight" from "equal weight". The blue-chip FTSE 100 .FTSE fell 0.8% after earlier
jumping more than 1%.
Both indexes had made their strongest gains in more than a
month in the previous session, powered by positive data from an
early-stage trial of a coronavirus vaccine.
"Stock markets have edged back from the highs seen
yesterday, but the broader recovery remains intact, as investors
continue to find the positives," said Chris Beauchamp, chief
market analyst at IG.
The relaxation of coronavirus lockdowns and a raft of
stimulus measures have put the FTSE 100 on track for a second
straight monthly gain. The benchmark index has rallied more than
22% from its mid-March low.
Money markets have ramped up expectations the UK could cut
interest rates below zero for the first time amid a surge in
jobless claims to 1996-highs and forecasts of the worst
recession in 300 years. Meanwhile, evidence of the business damage from the pandemic
continues to pile up, with tobacco group Imperial Brands Plc
IMB.L sliding 6.5% on plans to cut its dividend by a third and
forecasting a bigger hit from the crisis in the second half of
the year. "Overall the group should still be less affected than many
other groups, but the dividend cut will be painful for
shareholders regardless," said William Ryder, an equity analyst
at Hargreaves Lansdown.
The world's largest caterer Compass Group CPG.L fell 3.4%
as it sought to raise 2 billion pounds ($2.5 billion) in a share
sale to reduce debt and help it cope with the coronavirus crisis

Insurer Beazley Plc BEZG.L jumped 7.8% as it raised 247
million pounds ($302 million) in fresh capital.