UPDATE 2-FTSE gains on new Sino-U.S. trade hopes; mid-caps shine

* FTSE 100 up 0.4%, FTSE 250 up 0.7%

* Bloomberg report lifts optimism around trade

* Pound rise hits exporters, limits gains on main index

* M&C Saatchi tumbles after another profit alert (Adds news items, analyst comments, updates to closing prices)

By Shashwat Awasthi

Dec 4 (Reuters) - London's FTSE 100 ended a four-day losing run on Wednesday as a report that the United States and China were moving closer to a trade deal lifted demand for risky assets, while optimism around the British election supported the mid-cap index.

Markets rallied in a flurry after Bloomberg reported that Washington and Beijing were close to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal.

The main index rose 0.4%, boosted by Asia-exposed HSBC and miners, as the report helped offset pessimism from U.S. President Donald Trump's earlier comments that hinted at a delay.

But OANDA analyst Craig Erlam suggested the swings in market sentiment were due to a "lack of other talking points," while other analysts pointed to a lack of concrete details of a potential deal.

"I wouldn't believe a trade deal until I see one... Talks may not have deteriorated, but that doesn't mean a deal is in the offing," Markets.com analyst Neil Wilson said.

Trump said on Tuesday that a deal with Beijing might have to wait until after the U.S. presidential election in November 2020 and separately threatened to impose tariffs on France and the European Union.

Meanwhile, hopes of a Conservative majority in the Dec. 12 election helped blue-chip firms with more exposure to Britain such as housebuilders to advance, and the FTSE 250 surged 0.7%.

The pound and domestic stocks have rallied in recent weeks on hopes that Prime Minister Boris Johnson's Conservative Party will secure a majority in next week's election and push Brexit through. Several opinion polls have also bolstered those hopes.

Sterling jumped above $1.31 for first time in seven months, causing exporter firms to dip. That left the FTSE 100 trailing the broader European benchmark and Wall Street.

News-driven moves were in short supply and limited to smaller stocks.

AIM-listed M&C Saatchi tanked 47% to its lowest in more than a decade after the ad agency warned on annual profit for the second time in less than three months.

Fast-fashion retailer QUIZ skidded 7.3% after its half-year earnings plunged, another reminder of sluggish demand that the UK retail sector is grappling with.

By contrast, Stock Spirits added 9.3% on its best day since August, after its annual profit more than doubled on strong demand for its premium brand vodka in Poland and the Czech Republic. (Reporting by Shashwat Awasthi in Bengaluru; Editing by Rashmi Aich)