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UPDATE 2-UK stocks fall as trade fears, Labour manifesto weigh

By Shashwat Awasthi and Muvija M

* FTSE 100 down 0.3.%, FTSE 250 down 0.5%

* Sino-U.S. tensions dominate sentiment

* Royal Mail tanks as turnaround behind schedule

* Centrica, BAT outshine main index

* Labour manifesto weighs on sentiment at home (Adds company news items, updates to closing prices)

By Shashwat Awasthi and Muvija M

Nov 21 (Reuters) - UK shares fell on Thursday on concerns about U.S.-China relations and the opposition Labour Party's election manifesto plans to raise taxes on companies and renationalise infrastructure groups.

The main index shed 0.3%, weighed down by financial stocks and miners. The FTSE 250 dipped 0.5%, hit by a 14.2% fall in Royal Mail after it said its turnaround plan has fallen behind schedule.

The postal company's shares, which have lost nearly a third of their value this year, had their worst day in more than a year. Jefferies analysts said productivity targets looked increasingly challenging in light of tensions with the company's largest union.

Companies which might risk being renationalised under Labour - including National Grid, United Utilities, Severn Trent, SSE and Royal Bank of Scotland - lost 1-2.2%.

Global markets have been bogged down this week by worries over U.S.-China trade. U.S. President Donald Trump threatened to raise tariffs on Chinese imports if no deal is struck and U.S. Senate bills backing protesters in Hong Kong were condemned by Beijing.

However, both UK benchmarks cut losses after a report that Washington could delay tariffs on Chinese imports even if a deal has not been reached by Dec. 15.

Shares of British Gas-owner Centrica outperformed the blue-chip bourse and climbed 9% as the utility stood by its annual earnings target and raised its savings forecast.

Tobacco firm BAT also stood out with a 4% rise after U.S. health regulators said it had removed a plan to cap nicotine levels in cigarettes to non-addictive levels.

However, chemicals group Johnson Matthey tumbled 7.1% after reporting a lower profit and forecasting annual performance to fall below last year.

A bright spot among mid-caps was Britain's biggest motor insurer Direct Line, which advanced 6.4% after laying out a plan to rein in expenses. (Reporting by Muvija M, Shashwat Awasthi and Indranil Sarkar in Bengaluru; Editing by Shailesh Kuber and Andrew Heavens)