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UPDATE 1-FTSE 250 rises to record close, blue-chips shrug off Reckitt blip

* FTSE 100 up 0.4 pct

* FTSE 250 up 0.6 pct to a record close

* Reckitt dips after fall in Q3 sales

* Rio slips on SEC fraud charges

* Softcat jumps 6 pct (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

LONDON, Oct 18 (Reuters) - British mid-caps jumped to a record closing level on Wednesday as investors grew more comfortable with the smaller, more domestically-focused stocks, while the FTSE 100 held its ground as third quarter earnings trickled in.

The FTSE 250 was up 0.6 percent on the day, closing at a record 20,263.1 points. Mid-caps have strongly outperformed the bigger index this year, up around 12 percent against the FTSE 100's 6 percent rise.

"Investors are starting to feel safer with mid-caps, and more worried about a series of warnings on big FTSE companies," said Colin McLean, managing director at SVM Asset Management.

Smaller companies which occupy niches in sectors like tech and retail, with disruptive potential, are drawing in investors keen for growth, he added.

"If a mid-cap business does one thing and does it well, people feel more comfortable about its capacity to take business away from other global businesses," said McLean.

The blue chip FTSE 100 index was up 0.4 percent, helped by a weaker pound following data showing UK wage growth edged above forecasts, bolstering expectations for a Bank of England rate hike.

Shares in Reckitt Benckiser fell 2.5 percent after the consumer goods firm cut its full-year sales forecast, struggling with fallout from a cyber attack, a failed product launch and a safety scandal in South Korea.

Reckitt also said it will split into two business units.

"Of all the profits warnings we've seen of late, this is by far the best received perhaps because the Q3 performance is still actually fairly good and we don't see things getting markedly worse in Q4 for the full year," Mike van Dulken, head of research at Accendo Markets, said.

Healthcare firm Shire was the worst faller, down 3.1 percent after Citigroup removed it and Swiss pharma firm Roche from its "focus list" of stocks, instead naming AstraZeneca its top pick.

Miner Rio Tinto declined 3 percent after the U.S. Securities and Exchange Commission charged it and two of its former top executives with fraud.

Financials added the most points to the index, with HSBC , Prudential and Legal & General all rising 0.6 to 1.1 percent as analysts said the likelihood of a November rate hike from the Bank of England rose.

Mid- and small-cap companies saw the most dramatic share price moves on the day.

Shares in tech firm Softcat rose 6 percent after it reported an increase in full-year revenue, though Nostrum Oil & Gas dropped 3 percent after saying it expected to see a hit to production in the first half of 2018.

Spire Healthcare jumped 8.6 percent after broker Panmure Gordon upgraded its view on healthcare stocks, saying Spire's 19 percent drop in mid-September was the main reason for recent underperformance in a UK life sciences sector it saw entering a strong period.

Airline Flybe plummeted 20.5 percent after issuing a profit warning, with higher maintenance costs weighing on performance.

"The worry is that (Flybe's) cost base isnt strong enough to weather the headwinds facing the sector," Neil Wilson, senior market analyst at ETX Capital, said.

"Many small and mid-sized carriers are limping on thanks to cheap oil but further consolidation looks inevitable as capacity growth shrinks margins at the less competitive carriers," Wilson added.

(Reporting by Kit Rees; Editing by Catherine Evans)