UPDATE 1-Banks bring gains for FTSE 100, exporters weigh

Britain's main index edged higher on Friday, led by financial stocks, but losses in stocks of global companies due to a rise in the pound and a slide in the shares of the world's largest spirit company Diageo capped the gains. The FTSE 100 climbed 0.1% by 0812 GMT, with banks overpowering steep falls in exporters including AstraZeneca and British American Tobacco. A rise in sterling meant the value of their U.S. earnings would drop.

Shares of Diageo, sensitive to moves in sterling, lost 2%. Reuters reported on Thursday that unions were demanding a 5% pay rise for workers due to go on strike in Scotland later this month. The more domestically-focussed FTSE 250 rose 0.4%, tracking gains in the local currency that has strengthened in recent weeks as steps by lawmakers to prevent a no-deal soothed nerves concerning a chaotic departure.

Dublin's main index, considered a barometer of Brexit sentiment, jumped 0.9% after Northern Ireland's largest political party said it would insist on choosing which European Union laws to implement. "That (DUP's stance) and, perhaps, John Bercow's promise to 'creatively' stop a no-deal Brexit if Boris Johnson decides to ignore the law preventing such an option," Spreadex analyst Connor Campbell said.

Stocks vulnerable to a hit from Brexit advanced in early deals. Lloyds, the country's biggest lender, rose 3% and housebuilders climbed to levels not seen since late July. The FTSE 100 is set for its third straight week of gains as hopes for more stimulus and signs of improvement in global trade relations have helped the index recover after suffering its biggest monthly fall this year in August.

On the trade front, U.S. President Donald Trump said late on Thursday that he preferred a comprehensive trade deal with China, although he did not rule out the possibility of an interim pact. Global miners Antofagasta and Glencore, exposed to the economic conditions in world's top metals consumer China, climbed more than 2% each.

Among mid-caps, Woodford Patient Capital Trust, money manager Neil Woodford's listed fund, fell 4% after the trust's administrator cut the valuation of one of its holdings. Engineering company IMI Plc slipped 4% after brokerage Berenberg started coverage of the stock with 'sell' rating.

Small-cap recruiting firm Sthree added 1.5% after reporting a rise in quarterly net fees as robust hiring overseas more than offset weakness at home. ($1 = 0.8079 pounds)

Also Read: FTSE 100 slips as pound recovers, Diageo slides

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