UPDATE 1-FTSE gains after report renews Sino-U.S. trade hopes; mid-caps shine

London's FTSE 100 shed early losses to rise on Wednesday, after a report renewed hopes of the United States and China moving closer to a trade deal, offsetting the pessimism from U.S. President Donald Trump's latest comments hinting at a delay.

The benchmark index advanced 0.3%, boosted by Asia-exposed HSBC Holdings Plc and oil majors. Heavyweight miners gave up initial losses to lend further support. Markets jumped 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, despite tensions over U.S. stance on Hong Kong and Xinjiang.

That helped Britain's blue-chip index shrug off losses in exporter firms such as pharmaceutical firm AstraZeneca, which were pressured by a stronger pound. The mid-cap FTSE 250 outperformed, with a 0.6% surge by 0920 GMT.

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 the Dec. 12 election and push Brexit through. Several opinion polls have also bolstered those hopes. Wednesday's gains meant the FTSE 100 was on track to stem a run of four straight sessions of losses, which has seen the index shed more than 3.5% amid worries over global trade.

Trump said on Tuesday that a trade agreement with Beijing might have to wait until after the U.S. presidential election in November 2020. He had, earlier in the day, also threatened to slap tariffs on France and the European Union. "Markets are discounting a trade deal with China being done this year, but it's still not impossible," Markets.com analyst Neil Wilson said.

He added that a tit-for-tat trade war between the EU and the U.S. was a risk, but "not to be overplayed yet." News-driven moves were in short supply and limited to smaller stocks.

Shares of AIM-listed M&C Saatchi tanked 43% to their lowest in more than a decade after the advertising agency forecast lower annual profit, its second warning in less than three months. Fast-fashion retailer QUIZ skidded 9% after its half-year earnings plunged, another reminder of sluggish demand that the UK retail sector is grappling with.