UPDATE 2-London stocks plunge as airlines gasp for survival amid coronavirus

* FTSE 100 down 4%, FTSE 250 fell 7.8%
* UK stocks hit lowest level since Oct 2011
* More pain for airlines as virus hits travel
* Finablr CEO to step down

(Adds comments, updates to close)
By Shivani Kumaresan and Devik Jain
March 16 (Reuters) - UK shares plunged on Monday as airlines
announced flight cuts and stepped up calls for emergency aid to
get through the coronavirus outbreak.
London's blue-chip FTSE 100 index .FTSE dropped 4% to its
lowest since October 2011, adding to a 17% slide last week,
while the broader European STOXX 600 index .STOXX was down
4.9%.
A volatility gauge for eurozone stocks .V2TX , commonly
known as the fear gauge, jumped to an all-time high of 95.02
points.
Britain's airline stocks took the biggest hit after two of
the largest airlines in Europe, British Airways and easyJet,
warned of aircraft groundings on an unprecedented scale as the
coronavirus pandemic took a heavy toll on operations.
ICAG ICAG.L , the owner of British Airways, slid 27% after
saying it would cut its flying capacity by at least 75% in April
and May. Shares of EasyJet EZJ.L and TUI AG TUIT.L slumped
19.3% and 12.7%, respectively "The sector has a reputation for being heavily indebted and
a poor track record for seeing through crises. We've already
seen Flybe go into administration and we will no doubt see more
airlines fail," Russ Mould, investment director at AJ Bell,
said.
"Shareholders can wave goodbye to any dividends and airlines
certainly won't be buying back shares in the current
environment."
London's travel and leisure index .FTNMX5750 was down for
the ninth consecutive session. It fell 13.1% while the
domestically focused FTSE 250 dropped 7.8%
Shares in Holiday Inn-owner InterContinental IHG.L have
plunged 43% this year, while those in fellow London-listed
operator, Premier Inn-owner Whitbread WTB.L , are down more
than 50%. Hoping to improve liquidity and ease strains on global
funding markets, the U.S Federal Reserve cut its interest rates
to near zero on Sunday. The International Monetary Fund chief
has called for a coordinated fiscal stimulus to limit the
damage. "The price of money in the end is irrelevant if risk
appetite remains as low as ... current levels," said Stefan
Koopman, Senior Market Economist at Rabobank.
The only way the risk appetite would be bolstered was if
there were "clear scientific signs" that the virus was under
control, he said.
The number of deaths of Britons with coronavirus jumped by
14 in the last 24 hours to 35, while the total diagnosed rose by
20% to 1,372, health authorities said on Sunday. Adding to slowdown fears, a survey showed manufacturing in
Britain weakened sharply in early 2020 even before concerns
about the coronavirus crisis escalated, adding urgency to the
need for a trade deal with the European Union. Feeling the heat from lower rates, shares in major lenders
including Barclays BARC.L , Lloyds Banking Group LLOY.L fell
13% and 7.3%.
Insurers such as Admiral ADML.L , Aviva AV.L , Direct Line
DLGD.L and Prudential Plc PRU.L slumped on a sharp rise in
claims because of the economic fallout from the coronavirus
pandemic. Among other virus casualties, luxury carmaker Aston Martin
AML.L tumbled 30.2% to an all-time low after it said it was
increasing a 500-million pound ($617 million) capital-raising
plan by 36 million pounds. Retail chain Primark's owner, Associated British Foods
ABF.L , said it had shut 20% of its store space and would not
provide a full-year forecast due to the impact of the pandemic.
Payments group Finablr FINF.L fell 9.9% after it said its
CEO would step down, with the company finding it difficult to
survive following problems in its Travelex business,hit by a
ransomware attack last year.