UPDATE 2-FTSE 100 underperforms global peers on 3i drop, sterling gains

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

* Burberry jumps after Q2 results

* 3i drops after H1 report

* FirstGroup marks worst day in more than a year
(Adds news items, updates to close)

By Shashwat Awasthi and Muvija M

Nov 14 (Reuters) - London's FTSE 100 underperformed its
major global peers on Thursday, suffering its steepest intra-day
drop so far this month as falls in private equity company 3i,
stocks trading ex-dividend and a stronger pound hammered the
exporter-heavy index.

The main index fell 0.8% with 3i Group hitting a
five-month low after striking a cautious tone about new
investment opportunities and as heavyweight components Sainsbury
, Shell and GSK traded without
dividend entitlement.

The mid-cap FTSE 250 was 0.3% lower, with transport
operator FirstGroup dropping nearly 20% on its worst day
since May 2018 after a bigger first-half loss due to a charge
related to its Greyhound bus line business in the U.S..

Dollar earners were among the top drags on the main bourse
as sterling strengthened on hopes that Conservatives will win a
majority in the December election and finally break the deadlock
surrounding Britain's departure from the European Union.

Luxury brand Burberry outperformed the index,
rising 3.4% as the popularity of designer Riccardo Tisci's
collections boosted quarterly sales and offset declines in Hong
Kong where trading was hit by ongoing protests.

A host of trigger points, including weak Chinese factory
output data, anxiety around U.S.-China trade, and political
uncertainty in the U.S. amid an impeachment inquiry into
President Donald Trump also weighed on sentiment globally.

Slowing Chinese factory output growth was another sign of
how Beijing's trade dispute with Washington was weighing on
demand. To that end, China said the countries were holding
in-depth discussions on a "phase one" trade agreement.

"If a deal doesn't go through in the next couple of weeks,
the optimism seen in financial markets will rapidly turn into
pessimism and I wouldn't be surprised to see a 5-10% correction
in equity markets," said Hussein Sayed, Chief Market Strategist
at FXTM.

"At this stage, markets are in a wait-and-see mode until
further developments emerge."

G4S lost 2.4% after Norway's central bank said the
country's wealth fund, the world's largest, can no longer invest
in the security services company because of the risk that it
contributes to, or is responsible for human rights violations.

Airport operator Stobart tumbled 5% on the
small-cap index after suspending its dividend and posting a
bigger first-half loss.
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Kirsten
Donovan)