* FTSE 100 down 0.3 pct; FTSE 250 0.4 pct
* Housebuilders and banks under fresh pressure
* Sterling rises as May stands firm (Adding details, updating prices)
LONDON, Nov 16 (Reuters) - UK shares closed lower on Friday, ending a fragile comeback earlier in the session as banks extended heavy losses and bore the brunt of investor worries about Brexit, while multinational companies fell on the strong pound.
The FTSE 100 ended down 0.3 percent as the pound rose 0.5 percent, recovering from its worst day since 2016 on Thursday after Britain’s Brexit minister quit in protest over a draft deal with Brussels on leaving the European Union.
A stronger pound hurts blue-chip constituents, which make 70 percent of their income overseas.
It was down 1.3 percent on the week, capping one of the most turbulent weeks in the prolonged Brexit process that has roiled global financial markets.
The FTSE 250 was down 0.4 percent, notching up a 2.7 percent weekly drop.
British Prime Minister Theresa May won the backing of the most prominent Brexiteer in her government on Friday as she fought to save the draft European Union divorce deal that has stirred up a plot to force her out of her job.
“It looks quite likely that we might get a leadership challenge or confidence vote on the future of Conservative party leader and Prime Minister Theresa May over the next few days,” said Michael Hewson, chief market analyst at CMC Markets UK.
“If, as seems likely this happens we could well see further sterling volatility, however getting a vote is one thing, is the appetite there to unseat the Prime Minister and who would take her place?”
As earnings season neared an end, investor focus remained on politics, with banking and housing stocks losing more ground amid investor worries about the fall-out across financial markets and the economy from the torrid Brexit negotiations.
Royal Bank of Scotland fell another 3.3 percent after suffering its worst day since the Brexit vote on Thursday as shareholders priced in a higher risk of a general election.
The Labour party has pledged in its manifesto to break up the lender. Housebuilder Persimmon was down 2.3 percent.
AstraZeneca fell 1.8 percent after its immunotherapy drug Imfinzi did not meet the main goal of improving survival rates for patients with the most advanced form of lung cancer.
Amid the uncertainty, risk-averse investors sought safety in mining stocks, which were up 1.5 percent. Rio Tinto rose 2.9 percent.
Metal prices rose amid rising hopes that Washington and Beijing will resolve their longstanding spat over trade, while crude continued to recover from eight-month lows it hit earlier in the week.
Halma gained 2.1 percent as investors welcomed news it is acquiring Navtech Radar, which makes security devices for road tunnels and power stations.
While the deal is small in value at only 21 million pounds ($27 million), it is expected to immediately boost earnings, Jefferies analysts said.
“We believe that Navtech ticks a range of boxes, for niche presence, high returns and regulatory-, safety- and security-based drivers of growth, based on in-house technology that is already commercialised,” said Investec analysts.
The company will publish interim results on Tuesday.
Among the midcaps, Kier Group gained 3.8 percent after pledging to meet full-year targets and Centamin was boosted by a Morgan Stanley upgrade. ($1 = 0.7791 pounds)
Reporting by Josephine Mason; editing by Andrew Roche