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Britain's mid-caps outperform after Leadsom quits PM race

(Fixes typo in headline)

* Mid-cap FTSE 250 index up 2.6 pct

* Index outperforms as Leadsom quits PM race

* Property-related stocks in demand

By Atul Prakash

LONDON, July 11 (Reuters) - Britain's domestically-focused mid-cap share index hit a two-week high on Monday, outperforming the blue chip index, after Andrea Leadsom withdrew from the contest to succeed David Cameron as Britain's prime minister.

Leadsom's abrupt move left her rival Theresa May, who has served as interior minister for the past six years, as the only candidate. May is now set to become Britain's second female prime minister after Margaret Thatcher.

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The mid-cap FTSE 250 was up 2.6 percent by 1149 GMT after rising to its highest level since late June. However, the index is still down about 4 percent since a close on June 23 on concerns about a negative impact on the UK economy following last month's vote in Britain to leave the European Union.

"It (Other OTC: ITGL - news) 's interesting to see such a recovery in the FTSE 250, having seen the FTSE 100 sheltered by its international exposure. With May's victory, there will no longer be a policy vacuum, and that's bound to help the UK-focused index, as well as battered housebuilders," IG (LSE: IGG.L - news) analyst Chris Beauchamp said.

"It's a sign that investors are happy with the reduction in uncertainty surrounding the UK economy."

On the other hand, the FTSE 100, whose constituents have big international operations, underperformed. The blue-chip index was up 1 percent after hitting an 11 month high earlier in the session.

The FTSE 100 index is up nearly 5 percent since its close a day before the Brexit result in late June. However, in U.S (Other OTC: UBGXF - news) . dollar terms, it is down about 9 percent because of a slump in the value of sterling.

Sectors more sensitive to domestic policies and economic conditions were in demand, with blue-chip housebuilders Taylor Wimpey, Barratt Development and Persimmon surged between 7.5 and 8.6 percent.

Among mid-caps, F&C Commercial Property and UK Commercial Property advanced more than 7 percent.

Basic resources stocks were supported by stronger metals prices. The UK mining index rose 3 percent, the top sectoral FTSE 100 gainer, helped by a 2 to 6 percent rise Anglo American, Glencore (Xetra: A1JAGV - news) and Antofagasta (Other OTC: ANFGF - news) . (Additional reporting by Alistair Smout; Editing by Andrew Heavens)