* FTSE 100 up 0.4%, FTSE 250 up 0.2%
* Stimulus measures from China lift sentiment
* NMC erases losses to end on a positive note (Updates to closing prices)
Feb 17 (Reuters) - London's FTSE 100 recovered from two sessions of losses on Monday, as China's moves to counter the economic impact of the coronavirus epidemic soothed some of the nerves which have dominated the past fortnight's trading.
The FTSE 100 climbed 0.4%, with all but one sector in positive territory, while the midcap index rose 0.2%.
NMC Health, which has been the target of a Muddy Waters' short-selling attack since December, erased earlier losses to end 3% higher after the hospital operator said its founder B.R. Shetty has resigned as non-executive chairman.
The number of reported new cases of coronavirus in China's Hubei province, the epicentre of the outbreak, fell for two consecutive days before rising again on Monday.
China's central bank cut the interest rate on its medium term loans on Monday as it seeks to safeguard the economy from the impact of the virus, which has killed 1,770 people.
"These actions are likely to be followed up by lowering the country's benchmark rate later this week, as they continue to fight the spread of the coronavirus," FXTM analyst Hussein Sayed said.
The UK bluechip index, which has a larger exposure to commodity prices due to its heavyweight miners and oil majors, ended the last week in the red, while its European counterpart notched up a third week of gains.
Commodity prices have been pressured recently as the outbreak gave way to concerns of a slowdown in demand.
Petra Diamonds tumbled 16% on its worst day since July after a warning that the coronavirus outbreak had hurt demand in the market as stores were forced to shut during the important Lunar New Year period in China.
Among midcaps, Tullow Oil fell 3% after the company said it would plug a Peruvian well after no oil was found.
Jupiter Fund Management added 4% on the same index, touching a 1-1/2-year high, after it agreed to buy Merian Global Investors in a deal that will make it Britain's second-largest retail funds provider.