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UPDATE 1-Encouraging China trade comments, weaker pound lift FTSE 100

Shashwat Awasthi

* FTSE 100 up 0.6%, FTSE 250 down 0.2%

* Brexit fears hit domestic stocks

* Sterling weakness helps exporters gain

* Mid-cap Amigo sinks after forecast cut

* Micro Focus tanks after revenue warning (Adds analyst comments, context and updates share prices)

Aug 29 (Reuters) - London's FTSE 100 index climbed on Thursday with investors encouraged by China's fresh comments on possibly resolving the trade dispute with the United States, while exporter stocks gained as sterling fell after the suspension of parliament raised the prospects of a no-deal Brexit.

The main index added 0.6%, as internationally exposed firms such as BAT and AstraZeneca rose and offset a 30% slump in Micro Focus after the IT group warned on its full-year revenue.

The more domestically-focussed FTSE 250 index slipped 0.2% by 0732 GMT, as Brexit worries weighed and as consumer credit provider Amigo Holdings plunged more than 30% after cutting its annual forecast.

Following a subdued start to the session, investor sentiment was lifted after China's commerce ministry said Beijing and Washington were discussing face-to-face trade talks that were scheduled to be held in September.

The news was a welcome relief to stock markets, which have seen the trade dispute stoke fears of an impending recession in recent weeks. The FTSE 100 is on course for its sharpest monthly drop in four years.

Constituents of the exporter-heavy FTSE 100 also benefited from a weaker sterling, as Britain's Queen Elizabeth approved Prime Minister Boris Johnson's plan to suspend parliament, making it more difficult for lawmakers to prevent a no-deal Brexit.

"The calculation here would be that the Prime Minister is taking a high stakes gamble on forcing a vote of no confidence and daring MPs to push him towards calling a general election," CMC Markets analyst Michael Hewson said.

Demand for safe-haven assets such as gold has been high as broader uncertainties remain. Gold prices gained on the back of recession fears overnight, helping blue-chip precious metals miner Fresnillo rise 2.9%.

"Amidst all of the news flow it is becoming apparent that investors appear to be hunkering down for further economic weakness and the prospect of additional losses for stock markets," Hewson said.

Technology company Smiths Group was the biggest gainer on the main index after Goldman Sachs raised its rating on the stock.

Mid-cap recruiter Hays slid 3% after flagging tougher trading conditions and increasing signs of lower business confidence in Germany and Britain - two of its core markets. (Reporting by Shashwat Awasthi in Bengaluru; Editing by Arun Koyyur, Bernard Orr)