UPDATE 2-UK midcaps jump on hopes of Brexit deal before Christmas break

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
* Brexit talks snagged on fish, may take some hours
* Lloyds Bank, Barclays , Natwest among top boosts
* Small caps hit record high
* FTSE 100 up 0.10%, FTSE 250 adds 1.23%
* No stock market report on Dec 25, 28 due to holidays

(Updates to close)
By Medha Singh
Dec 24 (Reuters) - Domestically focused UK shares jumped
about 1% in Thursday's shortened trading session in anticipation
that Britain and the European Union would announce a trade pact
to avoid a chaotic separation at the end of the year.
The mid-cap FTSE 250 index .FTMC , considered a proxy to
Brexit sentiment, jumped 0.6% to its late February high, while
small-cap stocks .FTSC surged 0.8% to a record high.
Britain's biggest banks, Lloyds Banking Group LLOY.L ,
Barclays BARC.L and Natwest NWG.L , gained between 2% and
4.5% on high hopes that the long-elusive deal would brighten the
country's economic prospects in 2021. "By removing a major downside risk to the UK economy both in
the near-term and long-term, a deal would unlock significant
investment in UK and support the recovery once the ongoing
coronavirus shock starts to fade," Berenberg economists wrote in
a note.
The FTSE 100 .FTSE however, which includes many companies
that earn a large portion of their revenues overseas, gave back
most of its gains to end marginally, as the pound's rise weighed
on dollar-earners' shares.
Talks to conclude a Brexit trade could still have "some
hours to run", a British source said on Thursday, adding that
the two sides were still haggling over the EU's right to fish in
British waters. The FTSE 250 closed out the shortened week about 2% higher
on hopes that a trade deal would minimise Brexit disruption in
2021, as it also deals with the economic fallout from the
coronavirus pandemic.
Tighter restrictions went into effect in parts of Britain
this week to tackle the spread of a highly infectious variant of
the virus.
The FTSE 100 is down almost 14% this year, on track for its
worst year since 2008.
UK markets will remain closed for Christmas on Friday and
Boxing Day on Monday.