* FTSE 100 closes down 0.9 pct
* Retreats 2.2 pct in November
* Brexit optimism keeps sterling buoyant
* But puts pressure on UK dollar-earners
* Oil stocks fall ahead of OPEC meeting (Adds closing prices, quotes, shares, background)
LONDON, Nov 30 (Reuters) - Britain's index of leading shares lagged behind their European peers for a second session on Thursday, as it remained under pressure from a rising sterling buoyed by Brexit talks optimism.
Britain's blue chip FTSE 100 index closed down 0.9 percent lower at 7,326.67 points and ended November with a 2.1 percent loss, its worst since June, as the pound hit a two-month high.
"The FTSE 100 has been at the mercy of the pound today and even though the market managed to swing to positive territory earlier today, it was dragged back into the red as sterling picked up", CMC Markets Analyst David Madden told clients in a late afternoon note.
A report that Britain is close to a deal over the Northern Ireland border on Thursday added to the upbeat mood following Tuesday's media reports that Britain had reached a deal with the European Union over the size of its Brexit divorce bill.
In 2016, the FTSE 100 gained more than 14 percent, thanks to a fall in sterling after the June Brexit vote. This gave an accounting boost to the blue chip constituents which generate revenues in dollars.
By contrast the FTSE 100 is on course for a more modest gain of about 2.5 percent for 2017.
Jasper Lawler, head of research at London Capital Group, said that investors could be looking at mainland Europe as a place to park their money instead of UK equities.
"The natural assumption is that the stronger rate of economic growth that Europe is seeing gets translated into earnings for European companies, and it looks like their monetary policy is going to remain more accommodative for longer than in the UK," Lawler said.
A few companies bucked the trend like international private healthcare provider Mediclinic, whose shares jumped 4.7 percent on the back of a double upgrade from Jefferies to "buy" from "underperform".
"With the precipitous fall in the share price that overshot our prior PT (price target), we have reassessed our stance to understand if there is an opportunity for value," analysts at Jefferies said in a note.
"A model revamp and re-analysing the UAE highlights significant value and creates a great buying opportunity."
BAE Systems rose 1.5 percent after the defence firm said that it expected no material impact on its earnings from new accounting standards.
Aviva edged up 0.4 percent after it announced it expects to generate an extra 3 billion pounds ($4 billion) in cash over the next two years and will make acquisitions as well as giving money back to shareholders, sending its share price to three-month highs.
Shares in newspaper publisher Daily Mail and General Trust plummeted close to 24 percent, their biggest one-day drop in more than 20 years after the group reported a 13 percent drop in profit and a weak outlook.
Supermarkets also suffered, as a survey showed that British consumers, the main drivers of the economy, were at their least confident since just after last year's Brexit vote.
Tesco lost about 2 percent and Sainsbury was down 1.4 percent.
Elsewhere losses for energy stocks weighed, with BP <BP.L and Royal Dutch Shell down 1.1 and 0.4 percent as oil prices fell after OPEC members agreed to extend curbs on output to the end of next year.
(Reporting by Kit Rees and Julien Ponthus; Editing by Matthew Mpoke Bigg)