Britain's FTSE rebounds, Kingfisher jumps as Homebase changes hands

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* Global relief on N.Korea reaction to Trump

* FTSE 100 up 0.3 pct

* Index set for a weekly loss

* UK GDP barely grew in Q1

By Julien Ponthus

LONDON, May 25 (Reuters) - Kingfisher (Frankfurt: 812861 - news) led a rebound in UK shares on Friday amid relief on global markets about Pyongyang's measured response to the canceling of the summit between the United States and North Korea.

At 0900 GMT, The blue chip FTSE 100 rose 0.32 percent at 7,740.47 points but was nevertheless set to post a slight weekly loss, breaking an eight-week run of gains.

Confirmation that Britain's economy barely grew during the first quarter of 2018 had little impact.

Kingfisher, Europe's second largest home improvement retailer, posted the best performance after Australia's Wesfarmers said it would sell rival UK home improvement chain Homebase just two years after buying it.

Analysts at Jefferies said the sale constituted "very good news" for Kingfisher and its B&Q chain, which competes with Homebase.

"Today's news should see B&Q’s biggest competitor become much more sensitive to short, and mid term, margin and cashflow challenges," they argued.

At the opposite side of the trading floor, Royal Mail (LSE: RMG.L - news) shares sustained the heaviest losses, down 2.9 percent as broker Berenberg downgraded the stock to "sell" on increasing growth and profit risks.

It also noted that complying with new EU regulations to protect privacy may weigh on marketing activities.

AstraZeneca (NYSE: AZN - news) rose 0.9 percent after its immunotherapy drug Imfinzi hit a second important goal by improving overall survival in lung cancer patients, boosting prospects for a medicine that has already got off to a promising commercial launch.

Among smaller companies, Gold miner Centamin (Frankfurt: A1JPZ6 - news) dropped close to 17 percent after it made a drastic cut to its full-year production guidance and raised its cost expectations because of lower-grade ore at a mine in Egypt.

Environmental infrastructure (Other OTC: EIHC - news) company Pennon Group (Frankfurt: 3PNA.F - news) added 5 percent after reporting its full-year profits. Gambling company GVC Holdings (Frankfurt: 6GI.F - news) was up 2 percent after it raised its forecast of cost savings from its 4 billion pound acquisition of Ladbrokes Coral (LSE: LAD.L - news) . (Julien Ponthus)