UPDATE 2-FTSE gains on new Sino-U.S. trade hopes; mid-caps shine

* FTSE 100 up 0.4%, FTSE 250 up 0.7%
* Bloomberg report lifts optimism around trade
* Pound rise hits exporters, limits gains on main index
* M&C Saatchi tumbles after another profit alert

(Adds news items, analyst comments, updates to closing prices)
By Shashwat Awasthi
Dec 4 (Reuters) - London's FTSE 100 ended a four-day losing
run on Wednesday as a report that the United States and China
were moving closer to a trade deal lifted demand for risky
assets, while optimism around the British election supported the
mid-cap index.
Markets rallied in a flurry after Bloomberg reported that
Washington and Beijing were close to agreeing on the amount of
tariffs that would be rolled back in a phase-one trade deal.
The main index .FTSE rose 0.4%, boosted by Asia-exposed
HSBC HSBA.L and miners .FTNMX1770 , as the report helped
offset pessimism from U.S. President Donald Trump's earlier
comments that hinted at a delay.
But OANDA analyst Craig Erlam suggested the swings in market
sentiment were due to a "lack of other talking points," while
other analysts pointed to a lack of concrete details of a
potential deal.
"I wouldn't believe a trade deal until I see one... Talks
may not have deteriorated, but that doesn't mean a deal is in
the offing," Markets.com analyst Neil Wilson said.
Trump said on Tuesday that a deal with Beijing might have to
wait until after the U.S. presidential election in November 2020
and separately threatened to impose tariffs on France and the
European Union. Meanwhile, hopes of a Conservative majority in the Dec. 12
election helped blue-chip firms with more exposure to Britain
such as housebuilders .FTNMX3720 to advance, and the FTSE 250
.FTMC surged 0.7%.
The pound and domestic stocks have rallied in recent weeks
on hopes that Prime Minister Boris Johnson's Conservative Party
will secure a majority in next week's election and push Brexit
through. Several opinion polls have also bolstered those hopes.
GBP/
Sterling jumped above $1.31 for first time in seven months,
causing exporter firms to dip. That left the FTSE 100 trailing
the broader European benchmark .STOXX and Wall Street.
News-driven moves were in short supply and limited to
smaller stocks.
AIM-listed M&C Saatchi SAA.L tanked 47% to its lowest in
more than a decade after the ad agency warned on annual profit
for the second time in less than three months. Fast-fashion retailer QUIZ QUIZ.L skidded 7.3% after its
half-year earnings plunged, another reminder of sluggish demand
that the UK retail sector is grappling with. By contrast, Stock Spirits STCK.L added 9.3% on its best
day since August, after its annual profit more than doubled on
strong demand for its premium brand vodka in Poland and the
Czech Republic.