September 27, 2017 / 4:26 PM / in 9 months

UPDATE 1-Britain's FTSE supported by weaker pound and financials

* FTSE climbs 0.4 pct; up over 2 pct YTD

* StanChart gains as Investec advises to close shorts

* Pearson boosted by upbeat Exane note on strategy change (Adds detail and prices at close)

By Danilo Masoni and Kit Rees

MILAN/LONDON, Sept 27 (Reuters) - Britain’s top share index snapped two days of losses on Wednesday as some export-oriented companies found support in a weaker pound and financial stocks were buoyed by Standard Chartered after a broker upgrade.

Gains were driven by a revival in appetite for riskier assets as investors mulled plans in the United States to cut corporate tax.

Britain’s blue-chip FTSE 100 index ended the session up 0.4 percent at 7,313.51 points, while mid-caps also rose 0.3 percent.

“Softer pound translates into a better FTSE-appetite in London, although the overall lack of enthusiasm across the equity markets could limit gains,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

After hitting record highs in May thanks to the weakness in the pound that followed Britain’s decision to leave the European Union, the FTSE has started to lose ground. Sterling has strengthened as the Bank of England has turned more hawkish.

The FTSE is still up more than 2 percent so far this year but has underperformed the broader pan-European STOXX 600 index, as some brokers have turned more bearish on British equities.

Among financials, which provided the biggest uplift to the FTSE on Wednesday, Standard Chartered rose 1.8 percent after Investec upgraded the stock to “hold” from “sell”. It said that after a 15-percent drop in the last two months, it was time to close short positions.

“We see this as largely a ‘dawning of reality’ in relation to a continuing weak revenue performance (and outlook), with a little ‘overshoot’ seemingly driven by fresh geopolitical concerns,” Investec said in a note.

“We remain cautious on the stock, but ... we advise closing short positions.”

Pearson jumped nearly 4 percent after Exane BNP Paribas upgraded the stock to “outperform” from “underperform”, saying a change in strategy at the group, which is cutting jobs and dividends to revive its business, should help shares recover.

WPP, which has fallen 24 percent since the start due to the deterioration of its advertising outlook, declined 1.2 percent after Morgan Stanley downgraded the stock to “equal-weight” saying an early revival of confidence in the group’s business model appeared unlikely.

Among small caps, Carillion was an outstanding gainer, up 21 percent after a media report said “at least one” Middle Eastern construction company was preparing an offer for the troubled British outsourcer. Carillion shares have lost three quarters of their value this year. (Reporting by Danilo Masoni and Kit Rees; Editing by Hugh Lawson)

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