REFILE-UPDATE 2-Strong sterling knocks FTSE 100 despite trade lull

(Reinstates dropped word 'said' in para 7)

* FTSE 100 down 0.6%, FTSE 250 up 0.2%

* Exporter stocks fall as pound surges

* CYBG tanks on mid-caps

* Online retailer Boohoo jumps after forecast upgrade

* Industrials up on upbeat forecast from European peers

By Muvija M and Indranil Sarkar

Sept 5 (Reuters) - London's FTSE 100 slipped on Thursday as
a surge in sterling pushed exporter stocks lower, missing out on
a global rally led by growing hopes of a resolution to the
U.S.-China trade dispute.

The FTSE 100 slid 0.6%, with multinationals
including spirits company Diageo, pharma giants
AstraZeneca and GlaxoSmithKline slipping about
3% as a strong pound meant the value of their U.S. earnings was
lower.

Sterling recorded its biggest two-day rise in 10 months as
no-deal Brexit worries took a break, after lawmakers voted to
prevent Prime Minister Boris Johnson from taking Britain out of
the European Union without a deal on Oct. 31.

Strength in the local currency lifted the more domestically
focussed mid-cap index by 0.2%, despite a 21% slump in
CYBG to an all-time low. The Yorkshire Bank and Virgin
Money owner said it expected to increase its provision for
legacy payment protection insurance costs.

Stocks trading without dividend entitlement on the day such
as BHP, Glencore and Micro Focus fell
between 1.2%-3%, weighing heavily on the blue-chip index. Micro
Focus is also set to be relegated from the index later this
month.

Meanwhile, indexes on Wall Street and Europe scaled a
one-month high as agreement by China and the United States to
hold high-level trade talks in October spurred hopes that the
trade dispute between the countries would be resolved.

"If one was feeling cynical, Thursday's rally could be used
to illustrate investors' refusal to learn from their past
mistakes, stung time and time again by a pair of superpowers who
never manage to deliver on their trade talk promises," said
Spreadex analyst Connor Campbell.

The FTSE 100 had suffered its only monthly fall this year in
August when trade tensions escalated between the world's largest
economies.

As investors turned to riskier assets on account of renewed
trade hopes and away from safe haven gold, precious metals miner
Fresnillo tumbled nearly 6% and was the steepest faller
on the FTSE 100.

Industrial giants BAE Systems and Rolls-Royce
helped limit the index's fall with gains of 1% each after
French engine maker Safran hiked a profit forecast and
Rafale warplanes maker Dassault Aviation affirmed a
higher net sales target.

Another prominent gainer was turnaround specialist Melrose
which jumped 9% after its first-half profit beat
estimates.

On the mid-cap bourse, specialist media services company
Future Plc surged 10% after upbeat forecast, while
payments solutions provider Network International lost
7.5% as its major shareholder Emirates NBD Bank sold stock at a
discount.

AIM-listed online fashion retailer Boohoo shot up
by 15.1% to a life high after raising its annual revenue growth
forecast and small-cap oil firm EnQuest climbed 7% after
affirming its full-year production view and cutting debt.
(Reporting by Shashwat Awasthi, Muvija M and Indranil Sarkar in
Bengaluru; Editing by Bernard Orr)