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* FTSE 100 up 1.3 pct
* Citi upgrades UK equities
* Sophos surges after strong billings guidance
LONDON, April 5 (Reuters) - British shares rose on Thursday as the threat of a trade war between the United States and China
appeared to fade and a relief rally spread from Wall Street
and Asia to Europe.
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".
Cit said it expects returns of 10 percent or better to the end of 2018 "unless a Brexit or global shock drives a sharp deceleration in growth".
At 0810 GMT, the blue-chip FTSE 100 was up 1.3 percent. The mid-caps index rose 0.9 percent.
In that segment, shares in Sophos skyrocketed 19 percent after the cybersecurity firm said billings growth for the year would be towards the top end of guidance.
Electrocomponents briefly topped the Stoxx 600 with a 6 percent rise after the company reported better-than-expected margins. The shares later retreated to a gain of about 3 percent.
British casino operator Rank posted the worst performance of the midcap universe, down 14 percent. The company said it expected lower profit for the full year and remained cautious about consumer outlook in the UK.
Shares in BTG also suffered, losing about 12 percent as the British healthcare group announced that its 2017/2018 results would be hit by a 150 million-pound impairment charge.
Just Eat posted one of the worst performances among larger players, down 3.2 percent after JP Morgan downgraded the rating of its stock. The broker said it has turned more cautious and foresees a much bigger issue for its UK operations.
Britain's Hammerson rose 1.9 percent after it said it did not intend to complete shareholder documents related to its proposed acquisition of Intu Properties, because it was waiting for clarification on a bid from France's Klepierre. (Reporting by Julien Ponthus, editing by Larry King)