UPDATE 1-Hopes of impending Sino-U.S. trade deal boost UK stocks, TalkTalk slides

Britain's FTSE 100 climbed on Friday as signs the U.S. and China could soon settle their protracted trade dispute offset disappointing data from China, while TalkTalk sank after warning rising costs would hit its earnings.

The FTSE 100 was up 0.7 percent and the FTSE 250 was up 0.5 percent by 1000 GMT, in line with European stocks. The blue chips were up for a fourth straight session and on track for their best week since February 2018. Markets got a boost when U.S. President Donald Trump said he would meet Chinese President Xi Jinping soon to try to seal a comprehensive trade deal and the top U.S. negotiator reported "substantial progress" in two days of high-level talks.

"Though the details of what happens next are still unclear... the overall tone from the January-ending trade talks was one of cautious optimism," said Spreadex analyst Connor Campbell. "The lack of a concrete deal, however, meant the markets were reticent to celebrate anything just yet."

At home, data showed British factories stockpiled goods in January at the fastest rate since the early 1990s as they brace for a potentially chaotic divorce from the European Union. Uncertainty still looms large on that front, with just eight weeks to go until the March 29 deadline.

Banks and mining shares were among the top boosts to the FTSE 100 as signs of an impending deal helped the sectors most sensitive to the global economy. Dollar-earners also gained as weak PMI data pushed sterling lower. Signs of a trade deal nearing boosted luxury goods maker Burberry, among the most exposed to the world's second largest economy, as it rose 1.2 percent.

But data showing China's factory activity shrank by the most in almost three years in January kept gains muted. Gold prices fell as investors sought riskier assets, leading Fresnillo down 2 percent to the bottom of the main index.

Weak earnings updates also weighed. TalkTalk shares sank 8 percent to a more than 7-month low after the broadband firm said full-year earnings would fall short of expectations due to higher costs from attracting more customers and changing its accounting standard.

Glencore edged 0.4 percent lower, among a handful of blue-chip losers, after Katanga Mining said the Democratic Republic of Congo asked it to suspend a project. Glencore owns a majority stake in Katanga. Metro Bank, whose stock has halved in value following an accounting error, snapped a five-day losing streak and was the top gainer on the mid-cap index. Its shares were last up 4.3 percent. (Reporting by Shashwat Awasthi in Bengaluru, Editing by Helen Reid and Toby Davis)