UPDATE 2-Trade view dims, Kingfisher drops on FTSE's worst day in 3 weeks

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

* U.S.-China tensions hit HSBC, oil, miners

* Kingfisher drops after Q3 report

* Mitchells & Butlers outshines mid-caps

* Graphic https://fingfx.thomsonreuters.com/gfx/mkt/12/8896/8808/graphics.png:
Sterling, FTSE 250 vs odds of Tory majority in Dec. election
(Adds news items, graphic, updates to closing prices)

By Shashwat Awasthi and Yadarisa Shabong

Nov 20 (Reuters) - UK stocks fell on Wednesday after three
sessions of gains as flaring tensions between China and the
United States cast doubt over prospects of a trade deal and
retailer Kingfisher slumped 7% following disappointing quarterly
sales.

The FTSE 100 lost 0.8% on its worst day in almost
three weeks, as trade concerns weighed on Asia-exposed financial
stocks like HSBC, while oil majors Shell and
BP and industrial stocks also slipped.

Losses on the more domestically-focussed FTSE 250
were slightly more contained, as the index gave up 0.3%.

However, earnings-driven gains helped pub operator Mitchells
& Butlers, software company Micro Focus and
thermal processing service provider Bodycote rise
between 4%-5% and outperform the mid-cap index.

Worries over U.S.-China trade escalated as President Donald
Trump threatened to raise tariffs on imports if no deal was
reached, while nerves were jangled further after the U.S. Senate
passed legislation backing protesters in Hong Kong, which drew
condemnation from Beijing.

That spurred a broad sell-off across global markets as
investors chose to prioritise safer bets over risky assets like
stocks. They will also keep an eye on the U.S. Federal Reserve's
latest minutes, though no surprises are expected.

"Given that the U.S. Senate has just passed legislation in
support of the Hong Kong protests, such a move threatens to
drive a wedge into ongoing negotiations while potentially
raising the barrier to a trade deal," FXTM analyst Han Tan said.

Shares in Aviva Plc fell 3.5% as investors were
underwhelmed by a strategy update from the insurer, which
analysts say is struggling for direction since replacing its top
boss.

Domestic stocks, which have benefited from polls indicating
a likely Conservative victory in the upcoming election, weakened
after three sessions, but still outperformed the broader
European benchmark.

Markets are viewing a prospective Tory victory as a positive
on hopes that Prime Minister Boris Johnson, with a majority in
parliament, will be able to reduce uncertainty by delivering
Brexit by the Jan. 31 deadline.

With less than a month to go before the ballot, Johnson on
Tuesday doubled down on his Brexit promise in a debate with his
main rival, Labour Party leader Jeremy Corbyn.

Other news-driven moves saw AIM-listed Fevertree,
which slid in early trading, recoup to rise 8% as the market
seemingly shrugged off the tonic water maker's revenue warning
to focus on sales growth in the U.S.
(Reporting by Yadarisa Shabong and Shashwat Awasthi in
Bengaluru; Editing by Uttaresh.V, Shounak Dasgupta and Giles
Elgood)