UK shares slipped on Wednesday, retracing gains from the previous session, as investors questioned whether the optimism over extensive stimulus measures in China was overdone. At 0715 GMT, the blue-chip FTSE 100 was down 0.3%.

It rose 0.3% in the previous session, amid a global rally after China released their biggest raft of stimulus measures since the COVID-19 pandemic.

However, the optimism faded as market watchers questioned whether the scope of proposed measures was extensive enough to fix deep-rooted issues in China and spark a sustained resurgence in consumer and industrial demand.

Even China’s central bank reducing its medium-term loan rate on Wednesday did little to lift sentiment again.

“Monetary policy remains unlikely to move the needle on Chinese growth … the Chinese economy needs fiscal stimulus and monetary policy alone isn’t sufficient to revive domestic demand,” analysts at BCA Research said in a note.

The pullback in UK equities was broad, with the beverage sector’s near 1% drop leading declines.

The banking and life insurance sectors lost about 0.8% each.

An index of oil and gas stocks dipped 0.3% as crude prices declined. However, industrial miners and precious metal miners built on gains from the prior session, rising 1% and 0.7%, respectively, as prices of copper and gold continued to rise.

London shares jump as China stimulus lifts mining, luxury stocks

The more domestically focused mid-cap index was flat, with financial shares keeping a lid on gains.

Among other single movers, real estate portal Rightmove lost 0.5% after rejecting a sweetened $8.1 billion takeover proposal from Australia’s REA Group, saying the increased bid was still “unattractive”.

Retailer DFS Furniture also dipped 0.5% after posting a 65.7% slump in annual profit.