March 29, 2019 / 10:05 AM / 5 months ago

UPDATE 2-FTSE 100 gains as trade progress offsets latest Brexit setback

* FTSE 100 up 0.6 pct; FTSE 250 up 1.1 pct

* Ireland’s main index up 1.5 pct

* Positive U.S.-China trade talks help miners gain

* Theresa May’s Brexit deal defeated for 3rd time

* AstraZeneca down after cancer drug tie-up (Adds news items, analyst comment, updates to closing prices)

By Shashwat Awasthi and Yadarisa Shabong

March 29 (Reuters) - Britain’s FTSE 100 rose on Friday as miners benefited from progress in the latest round of Sino-U.S. trade talks, while the mid-cap index rallied despite lawmakers rejecting Prime Minister Theresa May’s Brexit deal for the third time.

The FTSE 100 added 0.6 percent to post its third straight month of gains and its first quarterly rise since June 2018.

The domestically focused FTSE 250 surged 1.1 percent for its best quarter since September 2016, despite a lacklustre March as Brexit concerns mounted.

Ireland’s main index, often considered a barometer of Brexit jitters, advanced 1.5 percent.

The rejection of May’s European Union withdrawal agreement by parliament prompted a knee-jerk sell-off in stocks as the prospect of a disorderly ‘no-deal’ exit resurfaced.

This led to blue-chip housebuilders, considered particularly sensitive to Brexit developments, hitting session lows. Taylor Wimpey and Berkeley shed 1.5 percent and 1.9 percent, respectively.

“The Prime Minister’s vote may well come back for a fourth time, assuming she isn’t forced out in the interim, given it only lost by 58 votes, but that would be stretching it,” said CMC Markets analyst Michael Hewson.

“Even Lazarus only came back once.”

But miners and Asia-exposed financial heavyweights such as HSBC and Prudential helped the main bourse retain some of its gains, buoyed by “candid and constructive” talks between the United States and China as the world’s two largest economies tried to reach a truce in their long-standing trade dispute.

Oil majors also gained as crude prices rose and were set for their biggest quarterly rise since 2009.

On the flip-side, AstraZeneca slipped 5.6 percent on its worst day since July 2017 after a cancer drug deal with Daiichi Sankyo that could have the British drugmaker pay as much as $6.9 billion to its Japanese partner.

London-listed shares of TUI hit a record low after the German tour operator issued a profit warning due to the grounding of Boeing’s 737 MAX aircraft in the wake of two deadly crashes of the model.

Meanwhile, data showed Britain’s balance of payments shortfall got bigger in the last few months of 2018, hurt in part by a disappointing trade performance as the world economy slowed and Brexit neared.

News was limited among mid-caps, but alternative investment manager Man Group advanced 3.8 percent after Credit Suisse initiated coverage with an “outperform” rating. (Reporting by Shashwat Awasthi and Yadarisa Shabong in Bengaluru; Editing by Alison Williams and Mark Potter)

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