* FTSE 100 up 2.4 pct
* Citi upgrades UK equities
* Sophos surges after strong billings guidance (For a live blog on European stocks, type LIVE/ in an Eikon news window)
By Julien Ponthus
LONDON, April 5 (Reuters) - British blue chip shares rose to their highest level in more than three weeks on Thursday as the threat of a trade war between the United States and China appeared to fade.
In addition, a number of analysts now believe that current valuations make British stocks worth buying. Citing "recent underperformance and cheap valuations", Citi upgraded UK equities to "overweight".
Citi said it expected returns of 10 percent or better to the end of 2018 "unless a Brexit or global shock drives a sharp deceleration in growth".
The blue-chip FTSE 100 ended up 2.4 percent, its biggest one-day gain since June 2016. The mid-caps index rose 1.6 percent.
In that segment, shares in Sophos skyrocketed 15 percent after the cybersecurity firm said billings growth for the year would be towards the top end of guidance.
British casino operator Rank posted the worst performance of the midcap universe, down 15.7 percent. The company said it expected lower profit for the full year and remained cautious about the consumer outlook in Britain.
Shares (Berlin: DI6.BE - news) in BTG (Frankfurt: 908827 - news) also suffered, losing about 10 percent as the British healthcare group announced that its 2017/2018 results would be hit by a 150 million-pound impairment charge.
Britain's Hammerson (Frankfurt: 876140 - news) rose 1.6 percent after it said it did not intend to complete shareholder documents related to its proposed acquisition of Intu Properties (LSE: INTU.L - news) because it was waiting for clarification on a bid from France's Klepierre (EUREX: CL6.EX - news) . (Reporting by Julien Ponthus Editing by Alison Williams)