UPDATE 2-UK-focussed stocks catch Brexit breather; Hong Kong hopes boost FTSE

* FTSE 100 up 0.6%, FTSE 250 up 0.8%
* Brexit relief spurs appetite for equities
* Financials boost main bourse
* Homebuilder Barratt falls after results

(Adds news items, analyst comments, updates to closing prices)
By Muvija M and Shashwat Awasthi
Sept 4 (Reuters) - Domestically-focussed British stocks
advanced on Wednesday after parliament succeeded in taking steps
toward averting a no-deal Brexit, while Asia-facing banks gained
on hopes that protests in Hong Kong would end, leading the FTSE
100 higher.
The mid-cap FTSE 250 .FTMC , which generates half of its
income from the UK, climbed 0.8% as sterling also firmed after
British lawmakers seized control of the parliamentary agenda to
try to block a no-deal divorce from the European Union.
The FTSE 100 .FTSE rose 0.6% with Prudential PRU.L ,
Standard Chartered STAN.L and HSBC HSBA.L up between 1.8%
and 3.6% and luxury brand Burberry BRBY.L 1.7% higher, after
Hong Kong withdrew an extradition bill that had triggered months
of protests.
Upbeat sentiment was driven by parliamentary proceedings
late on Tuesday. Prime Minister Boris Johnson lost his working
majority and was defeated by lawmakers opposed to a no-deal
Brexit, who now hope to pass a bill that will seek to stop the
country from leaving the EU on Oct. 31 without transitional
arrangements.
Both UK indexes gained despite Johnson demanding a snap
election for Oct. 15 and even managed to shrug off the latest
purchasing managers' index (PMI) data showing that Britain's
Brexit-battered economy ran the risk of sliding into its first
recession since the financial crisis. "Recent developments, while not altogether unexpected, have
slightly reopened the second referendum door if a new election
sees the Conservatives under-perform," said Craig Erlam, senior
market analyst at Oanda.
"There's surely a few more twists and turns to come this
week."
A handful of news-driven moves saw Barratt BDEV.L ,
Britain's biggest housebuilder, slip 3.6% after it warned volume
growth would be towards the lower end of its target range in the
current year. Digital services company Kainos KNOS.L tumbled 11.7% to
the bottom of the FTSE 250 after it flagged caution in
public-sector spending in Britain against the backdrop of
Brexit.
Dunelm DNLM.L handed back its earlier gains and dropped
more than 9% as investors took note of the homewares retailer's
cautious outlook over upbeat results. Among smaller stocks, specialist pension provider Just Group
JUSTJ.L slumped 8.2% after half-year results, while retailer
QUIZ Plc QUIZ.L skidded 8.4% after it said the number of
shoppers coming into its fast-fashion stores had fallen this
year. Meanwhile, Marks & Spencer MKS.L , which has dipped this
week ahead of its possible relegation from the FTSE 100, added
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FTSE indexes vs European & U.S. peers since UK voted to leave EU
https://tmsnrt.rs/2PJW7Co
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