UPDATE 1-FTSE falters as Brexit hopes lift pound; domestic stocks rejoice

* FTSE 100 down 0.3%, FTSE 250 up 0.8%

* Brexit deal hopes lift sterling, hit exporters

* Housebuilders, UK banks jump

* WPP, Burberry fall after European rivals cut forecast

* Dart Group climbs higher after hiking profit view
(Adds news items, analyst comments, updates share prices)

By Shashwat Awasthi

Oct 11 (Reuters) - Britain's exporter-heavy FTSE 100 lagged
a trade sentiment-induced rally in global stocks on Friday, as
hopes that a Brexit deal may be clinched by the end of the month
lifted the pound and hammered international firms.

The blue-chip index, whose components book nearly
two-thirds of their earnings in the U.S. dollar, shed 0.3%, as
sterling firmed after Ireland sounded optimism on the chances of
Britain leaving the European Union in an orderly fashion.

"Some EU officials may not agree, but it was enough to light
a fire underneath sterling," Spreadex analyst Connor Campbell
wrote.

Exporter stocks such as Diageo, BAT and
Unilever dragged the most, while healthcare firms
AstraZeneca and GlaxoSmithKline also skidded.

However, stocks considered most sensitive to any Brexit
updates such as housebuilders and UK-focussed banks
advanced, and the domestically-focussed mid-cap index jumped
0.8% by 0744 GMT.

Shares of major blue-chip homebuilders Persimmon,
Barratt, Berkeley and Taylor Wimpey
added between 3.7%-5.6%, while RBS and Lloyds
also rose more than 4% each.

The FTSE 100 fell behind the broader European benchmark
, as well as Asian stocks, which rose after U.S.
President Donald Trump stirred hopes of a trade agreement with
China, calling the first day of talks "very good".

"Given the price action of the last 24 hours, one could
argue the foundations of this rally (in global stocks) have more
sand then cement," Oanda analyst Jeffrey Halley said.

"It will only take one negative comment to crack the edifice
and thus, staying on the sidelines and out of danger is still
the more sensible strategy."

The main index was also hurt by a near 4% drop in ad firm
WPP after French rival Publicis cut its sales
view for the second time, and a 3% fall in luxury brand Burberry
after German rival Hugo Boss cut its annual
forecast.

AIM-listed Dart Group surged 12% after the owner of
British airline and tour operator Jet2 raised its annual profit
view and said it had seen stronger demand for some products
since Thomas Cook collapsed.

The FTSE had confirmed a "Death Cross" pattern in the
previous session as its 50-day moving average (DMA) crossed
below the 200 DMA, a technical pattern usually seen as a warning
that more losses are likely in the near term.
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Bernard
Orr)