UPDATE 2-JD Sports leads FTSE 100 higher, rate cut hopes support

* FTSE 100 up 0.4%, FTSE 250 up 0.3%

* JD Sports hits life high after profit rise

* Galliford jumps on deal talks

* 888 skids as earnings hit by higher tax, Brexit-related
expenses
(Adds new items, analyst comments, updates to closing prices)

By Muvija M and Shashwat Awasthi

Sept 10 (Reuters) - London's FTSE 100 overcame early losses
to close higher on Tuesday as hopes of imminent interest rate
cuts from major central banks buoyed sentiment, while JD Sports
jumped to an all-time high on upbeat results.

The blue-chip index added 0.4%, with JD Sports
gaining 8.8% after its gym clothing and premium-branded
fashion helped it post higher profit and offset UK retail sector
gloom.

The FTSE 250 rose 0.3%, helped in part by a nearly
13% surge in Cairn Energy as strong half-year results
led to a production target upgrade.

In a sign of ongoing rotation, investors dumped defensive
shares and bought stocks of sectors that have underperformed
this year, helping an index of banks climb 2.4% for
its best day since January.

Shares of Lloyds and Barclays rose 4.3%
and 4.9%, respectively, while healthcare stocks GlaxoSmithKline
and AstraZeneca shed more than 2% each.

UK markets also looked past disappointing data from China
overnight that had added to fears of a global recession.

Speculation that the European Central Bank will cut interest
rates this week and that the U.S. Federal Reserve will follow
suit later this month in the face of slowing economic growth
helped stoke some risk appetite.

"Seeing as the ECB are tipped to go down the path of an
interest rate cut, stocks are likely to be buoyant between now
and the announcement," CMC Markets analyst David Madden said.

Oil heavyweights Shell and BP were the
biggest boosts to the main index as they tracked a rise in crude
prices on hopes that OPEC and other oil-producing countries may
agree to extend output cuts to prop up prices.

Mid-cap builder Galliford Try advanced 8% after it
restarted preliminary talks to sell its residential housing
businesses to Bovis Homes.

Bovis, whose shares dropped 3.5%, nudged up its proposed
offer and included a cash element, which Markets.com analyst
Neil Wilson said would be "a welcome injection for the newly
reorganised Galliford construction division."

Among small-caps, online gambling firm 888 Holdings
slumped 8.6%, its worst day in almost a year, after results
showed a hit to earnings from a rise in online gaming taxes and
administrative expenses due to Brexit preparations.
(Reporting by Muvija M in Bengaluru; Editing by Arun Koyyur and
Dan Grebler)