By Susan Mathew
(Reuters) - UK shares fell on Thursday after the Bank of England's slowed the pace of its huge bond-buying programme, while a surge in coronavirus cases in the United States and China fanned fears of a second wave of infections.
The blue-chip FTSE 100 (FTSE) was down 0.5% following its strongest two-day percentage gain in two weeks on Wednesday.
The BoE said it saw signs that the British economy was recovering from a pandemic-induced slump. It raised its asset purchase target by 100 billion pounds, as expected, but disappointed markets as it said the increase should see it through to the end of the year.
"The risk (for asset purchases) was skewed to the upside," said Stefan Koopman, senior market economist at Rabobank.
"In light of these expectations, the (bank's) decision actually turned out a bit hawkish," he said, adding that Rabobank still sees a further increase beyond August.
AstraZeneca (L:AZN) weighed the most, down 2.2%. The European Commission is in advanced deal talks with Johnson & Johnson (N:JNJ) on its COVID-19 vaccine under development, sources told Reuters.
Last week, many euro zone countries said they had acquired 400 million potential vaccine doses from the British drugmaker for its potential COVID-19 shot.
The mid-cap FTSE 250 (FTMC) fell 0.4%, with real estate (FTUB8600), consumer stocks (FTNMX3530) (FTNMX3570) and mining and metal (FTNMX1770) (FTNMX1750) stocks leading declines.
The commodity-heavy FTSE 100 has rebounded more than 25% from a coronavirus-driven crash in March, but the index has still lagged both European and U.S. stock markets amid forecasts of the worst UK recession in three centuries.
Among individual stocks, homebuilder Taylor Wimpey (L:TW) tumbled 6.0% after raising 522 million pounds ($655 million) in a discounted share sale, while Carnival Corp (L:CCL) slipped 1.1% after it reported a quarterly net loss of $4.4 billion.
Prudential (L:PRU) jumped 2.7% after it sold a minority stake in its U.S. business, Jackson, to Apollo Global-backed Athene Holding (N:ATH) for $500 million.