By Shreyashi Sanyal and Sagarika Jaisinghani

UK stocks closed firmly in the red on Thursday as investors worried that a recovery from a coronavirus-led economic slump would be slower than expected even as several hard-hit countries started easing lockdowns.

The blue-chip FTSE 100 was down 2.8%, with battered energy <.FTNMX0530> and travel and leisure <.FTNMX5750> stocks down nearly 4%. The mid-cap FTSE 250 shed 3%.

Insurance stocks <.FTNMX8530> fell 3.7% after Lloyd's of London said it was likely to pay up to $4.3 billion in claims related to the COVID-19 pandemic, while underwriting and investment losses for the global non-life insurance sector could reach a record $203 billion.

The two main UK stock indexes have now given up all the gains made this month as hopes of a speedy revival in business activity were dashed after U.S. Federal Reserve Chair Jerome Powell warned of an "extended period" of weak economic growth.

Even as some easing of lockdown restrictions and a raft of stimulus measures helped global equities rebound in the recent few weeks, investors remained cautious of a second wave of new coronavirus infections.

"If a second surge were to take place, overwhelming health infrastructure, governments may find themselves with little choice but to reintroduce lockdowns," said Seema Shah, chief strategist at Principal Global Investors.

"In that worst-case scenario, even the most monstrous policy stimulus could not support continued equity market gains."

On Wednesday, the UK posted its sharpest ever GDP contraction in March, with economists warning the slump could be worse in April. For the year, the Bank of England has predicted the worst recession in three centuries.

Data out of the United States continued to show more distress in its labour market as Americans filing for unemployment benefits rose to 2.981 million for the week ended May 9.

With the UK starting to ease some restrictions, housebuilder Persimmon said it had restarted 65% of its construction work and was reopening sales offices on May 15.

However, its shares fell 4.7% along with the wider housebuilding index <.FTNMX3720> as surveys suggested British house prices would only recover to their pre-lockdown levels in 11 months' time.

WH Smith reported an 85% slump in group sales in April, although a 400% rise in online book sales helped offset some of the damage from the closures of its kiosks and stores, sending its shares slightly higher in morning trading.

Investment management firm 3i Group Plc rose 6.3% to the top of the FTSE 100 after sticking to its plan to pay a 2020 dividend at a time when a slate of UK companies have cancelled payouts to shore up liquidity.

(Reporting by Shreyashi Sanyal, Sruthi Shankar and Sagarika Jaisinghani in Bengaluru; Editing by Anil D'Silva and Lisa Shumaker)