News: RIO UPDATE 1-UK shares join global stock recovery but Brexit nerves weigh

• FTSE 100 up 1.3 pct; midcap index up 0.9 pct
• WPP, Ashtead lead gainers after updates
• Banks fall, miners rise on trade optimism

(Adds details, closing prices)

UK shares joined a global equity bounce on Tuesday, although banks and other domestically exposed stocks were left behind as uncertainty grew over Britain's exit from the European Union.

The FTSE 100 .FTSE top share index was up 1.3 percent at the close with gains in mining stocks and big exporters helping it outperform the domestically tilted FTSE 250 .FTMC index, which gained 0.9 percent after hitting two-year lows on Monday.

Trading turned volatile towards the close after reports said lawmakers had enough letters to trigger a no-confidence vote in Prime Minister Theresa May's leadership, hours after German leader Angela Merkel ruled out further negotiations on Brexit.

Investors remained highly cautious as Europe's second largest economy was faced with several options regarding its divorce from the EU following May's decision on Monday to call off a parliamentary vote on her Brexit deal.

"It's virtually impossible to predict the outcome but we take a relatively neutral stance," said Nigel Bolton, chief investment officer of international equities at BlackRock.

"In the UK, we're keeping our neutral stance with a tilt to international earners. If we do come up with a deal, there's upside on the domestic side. But he says there’s still 30 percent downside risk to domestically focused equities even after the huge sell-off so far," he added.

Materials provided the biggest lift to the FTSE, as metal prices gained ground on renewed optimism over the China-U.S. trade dispute.

Shares in heavyweight miners Anglo American AAL.L , Rio Tinto RIO.L , and Glencore GLEN.L rose 3.3 to 5.5 percent.

WPP WPP.L rose as much as 8 percent after the world's biggest advertising firm said it would prioritise dividends over share buybacks as it laid out a three-year business plan.

The shares pared some gains to end up 4.8 percent. "We give a cautious welcome to the new strategy announced this morning but feel it could have been more ambitious and wide-ranging," said Liberum analyst Ian Whittaker.

GlaxoSmithKline GSK.L rose 0.7 percent, tracking gains in its sector and following an upbeat note from Jefferies on prospects for large-cap European pharma firms.

Banks were a weak spot, with shares in Lloyds LLOY.L and Royal Bank of Scotland RBS.L both hitting their lowest level since 2016. They ended down 1.1 and 0.3 percent respectively.

HSBC HSBA.L , which instead has a big overseas presence, rose 0.9 percent.

Among other domestically exposed stocks, Royal Mail RMG.L hit a new record low before recovering to end up 1.4 percent, while WM Morrisons MRW.L erased earlier losses on market rumours that the UK supermarket chain could be subject to a takeover approach by Amazon.com Inc.

Standard Life Aberdeen SLA.L fell 1.9 percent, leading losers on the FTSE after RBC cut the insurance company to "sector perform" from "outperform".

Property and casualty insurer Lancashire LRE.L rose after an upgrade from the same broker.

Ashtead AHT.L rose 3.6 percent after predicting full-year results would beat expectations, as its U.S. Sunbelt business rented out more industrial equipment in the first half of the year. (([email protected]; +39-02-66129734; Reuters Messaging: [email protected]; On Twitter http//twitter.com/damasoni))

((  
For related prices, Reuters users may click on - *  

UK stock report FTSE index: 0#.FTS6

 techMARK 100 index:  .FTT1X		  FTSE future	  0#FFI:   
 Gilt future		0#FLG:		  Smallcap index:	 .FTSC   
 FTSE 250 index:	  .FTMC		   FTSE 350 index:	 .FTLC   
 Market digest:	   .AD.L		   Top 10 by vol:	  .AV.L   
 Top price gainer   .NG.L		   Top % gainer	  .PG.L   
 Top price loser	.NL.L		   Top % loser	   .PL.L   
 * For related news, click on - * 

 UK hot stock	  [HOT and GB]	 Wall Street:			 
 Gilts report:					 Euro bond report	

Pan European stock report: Tokyo stock HK stock Sterling report: Dollar report:

• For company prices, click on - * Company directory: UKEQ By sector: FTAX

 European Equities speed guide................  EUR/EQUITY   

FTSE Eurotop 300 index........................... .FTEU3 DJ STOXX index................................... .STOXX Top 10 STOXX sectors........................ .PGL.STOXXS Top 10 EUROSTOXX sectors................... .PGL.STOXXES Top 10 Eurotop 300 sectors.................. .PGL.FTEU3S Top 25 European pct gainers.................... .PG.PEUR Top 25 European pct losers..................... .PL.PEUR ))