* Brexit negotiations enter crucial 48 hours
* Micro Focus tops gains on mid-cap index after GS upgrade
* FTSE 100 up 0.1%, FTSE 250 down 1%
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
By Shivani Kumaresan
Dec 7 (Reuters) - UK's domestically-exposed stock index
pulled back on Monday from its highest level in 10 months on
fears that Britain will stage a disorderly exit from the
European Union, with banks and real estate taking a sharp
beating.
The mid-cap FTSE 250 ended 1.25% lower, logging its
worst day in about six weeks, as negotiators entered last ditch
efforts to bridge stubborn differences over a post-Brexit trade
deal to avoid a messy divorce at the end of the month.
The export-heavy FTSE 100 was up about 0.1% as
no-deal Brexit worries pressured the pound.
Economically-sensitive banks dropped 2.8% while
homebuilders, vulnerable to Brexit-related developments, also
tumbled with Berkeley, Barratt Development,
Persimmon, Taylor Wimpey down between 2% and 7%.
While a deal is clearly the preferred outcome, its impact on
both UK equities and the pound is unlikely to be that great,
said Rupert Thompson, chief investment officer at Kingswood.
"After all, any deal will be a bare-bones one and is still
likely to lead to short-term disruption to the economy."
British and EU negotiators have been haggling for weeks over
fishing rights, ensuring fair competition for companies and ways
to solve future disputes. Investment bank JPMorgan said odds of
a no-trade deal exit had risen to one third from 20%.
Still, the FTSE 100 is on track to record its biggest
quarterly gain since 2010 after being boosted by hopes that a
working COVID-19 vaccine would spur a global economic recovery
next year.
In company news, British IT company Micro Focus
jumped about 14% as Goldman Sachs raised its rating to "buy"
flagging signs that slowing revenue deceleration was on the
horizon.
ContourGlobal gained about 2.6% as the British power
generator said it was buying a portfolio of gas-fired power
plants, including one each in Texas and New Mexico, in a deal
valued at $837 million, marking its entry into the lucrative
U.S. market.
(Reporting by Shivani Kumaresan in Bengaluru; Editing by Arun
Koyyur, William Maclean)
