* FTSE 100 up 0.2%, FTSE 250 up 0.3%
* Domestic stocks gain on lingering Brexit deal hopes
* Gains among mid-caps limited by downbeat trading updates
* Neil Woodford's listed fund hits record low
* Indivior shines after raising FY forecast (Adds news items, analyst comments, updates share prices)
By Shashwat Awasthi
Oct 15 (Reuters) - Britain's domestically focussed mid-cap index advanced on Tuesday amid hopes that a Brexit deal could be clinched this week, though gains were capped by steep falls in the shares of a slew of companies as the latest earnings season kicked off.
The FTSE 250 .FTMC , which had surged more than 4% last Friday after positive Brexit signals from Ireland, added 0.3% by 0800 GMT.
JP Morgan's UK domestic plays index .JPDEUKDM , which tracks about 30 UK stocks that make all or most of their revenue at home, rose 1%. The index has gained more than 10% since September.
The FTSE 100 .FTSE also inched 0.2% higher, helped by domestic banks such as Lloyds LLOY.L , and stocks considered most sensitive to any Brexit fallout such as housebuilders .FTNMX3720 and consumer goods firms.
Britain and the European Union are set for crunch Brexit talks at a summit on Thursday and Friday, with Prime Minister Boris Johnson intent on delivering Brexit on Oct. 31 and the EU still looking for further concessions. week's observation that watching from the sidelines could be the smartest investment strategy of the year, probably still holds water this week," Oanda analyst Jeffrey Halley said.
Initial optimism surrounding U.S.-China trade was tempered and traders looked for more concrete details to assess any progress the countries had made last week to end their spat.
Any prospect of a rally among mid-caps was quelled, as downbeat trading updates led pub operator Marston's MARS.L , industrial process furnace and ovens maker Vesuvius VSVS.L and engineering group Renishaw RSW.L 8% to 10% lower.
Marston's warned on its annual profit, while Vesuvius and Renishaw pointed to tough market conditions hitting their financials. INDV.L , whose shares have more than halved in value this year, jumped 12% after the drugmaker raised its annual sales and profit view. Woodford Patient Capital Trust WPCT.L tumbled 7% to a fresh record low after the corporate director of money manager Neil Woodford's suspended LF Woodford Equity Income Fund said the fund is to be wound up. career of Neil Woodford as stock-picker par excellence has come to an ignominious end," Markets.com analyst Neil Wilson said.
Ryan Hughes, head of active portfolios at AJ Bell, said it was highly unlikely that Woodford would remain manager of WPCT.
Recruiter Hays HAYS.L was a bright spot, jumping 6% as strong hiring in the U.S. and China offset a drop in the United Kingdom.