UPDATE 2-FTSE enjoys best day since July; mid-caps gain for 4th week

* FTSE 100 up 1.2%, FTSE 250 up 0.6%

* Indexes bounce back after 2 days of losses

* Pound falls after PMI data, aids exporters

* Mid-cap Hochschild Mining, Coats Group underperform
(Adds news items, updates to closing prices)

By Shashwat Awasthi and Yadarisa Shabong

Nov 22 (Reuters) - London's FTSE 100 surged more than 1% on
Friday after two days of selling, as investors turned cautiously
optimistic about a Sino-U.S. trade deal and exporter stocks rose
after the pound weakened on downbeat U.K. Purchasing Managers'
Indexes (PMI) data.

The main index was powered on its best day since
late July by trade-sensitive scrips including HSBC and
miners and further bolstered by
internationally-exposed firms such as Unilever and
Diageo.

The FTSE 250 added 0.6%, though gains were capped by
data that showed British business this month suffered its
deepest downturn since mid-2016 amid uncertainty around the
general election and Brexit.

Further keeping gains in check was a 9% slide in Hochschild
Mining after its 2020 output targets disappointed, and
an 8% drop in thread manufacturer Coats Group after it
warned on annual profit.

Hochschild shares endured their worst day since Aug. 2017,
while Coats' shares hit their lowest level in two-and-a-half
years.

Despite this, the mid-caps enjoyed their fourth straight
week of gains, buoyed in recent sessions by polls that point to
a likely Conservative Party victory in the Dec. 12 election.

A Conservative victory is seen as more likely to see through
Brexit and it was this view that led the FTSE 250 to a more than
one-year high earlier this week.

The blue-chip bourse recouped all losses from the past two
sessions as mild risk appetite returned after a report http://bit.ly/2O6RSOl
that Washington may delay tariffs on Chinese imports even if a
deal is not signed by a Dec. 15 deadline.

Furthermore, comments by President Xi Jinping that Beijing
wanted to work out an initial trade pact with Washington and a
softer pound helped the FTSE handily outperform the broader
European benchmark.

"Investors are mindful of the trade deal's importance in
supporting hopes of a global economic recovery next year," FXTM
analyst Han Tan said. "A further escalation in trade tensions
would only undermine the world economy's growth momentum while
amplifying chatter about a recession."

Trade tensions had flared earlier this week after President
Donald Trump threatened to raise tariffs on Chinese imports if
no deal was struck, and after the U.S. Senate backed a bill
supporting protesters in Hong Kong, which drew Beijing's ire.

Shares in AstraZeneca advanced as much as 2.8% after
the drugmaker won earlier-than-expected U.S. regulatory approval
for a leukaemia drug.
(Reporting by Yadarisa Shabong and Shashwat Awasthi in
Bengaluru;
Editing by Subhranshu Sahu, Uttaresh.V and Andrew Cawthorne)