UPDATE 1-British mid-caps jump on Brexit trade deal hopes

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* EU’s Barnier says UK trade deal still possible

* AstraZeneca shares fall on $39-billion Alexion bill

* Codemasters shine on acquisition deal

* FTSE 100 up 0.2%, FTSE 250 adds 1.1% (Adds comments, updates prices)

Dec 14 (Reuters) – London’s mid-cap index jumped 1% on Monday on hopes that Britain and the European Union could still agree on a Brexit trade deal, while drugmaker AstraZeneca tumbled after it announced a $39 billion buyout of U.S.-based Alexion Pharmaceuticals.

The domestically focussed FTSE 250, considered a barometer for Brexit sentiment, was up 1.1% by 0923 GMT, with industrial, consumer discretionary and financial stocks leading gains.

The exporter-heavy FTSE 100 rose just 0.2% with the pound set for its best day in about a month as the EU’s Brexit negotiator, Michel Barnier, said that sealing a new trade pact was still possible.

“It offers more hope but it’s all hot air until we see something, a yes or no on the trade deal,” said Keith Temperton, a sales trader at Forte Securities.

London’s stock indexes have tracked a rally in global equity markets as signs of a working COVID-19 vaccine raised hopes of a faster economic rebound next year, but gains have been capped by fears around the near-term economic damage from business curbs and mass layoffs.

On Monday, the UK’s trade body for manufacturing slashed its 2021 growth forecast for the sector.

Still, the housebuilding index jumped 0.8% as property website Rightmove forecast house price inflation would retain much of its momentum next year despite the looming end of a tax break and forecasts of rising unemployment.

In company news, AstraZeneca shares sank 9% as investors moved to price in the drugmaker’s $39 billion deal for biotech firm Alexion, the company’s largest ever and one of this year’s biggest mergers globally.

Codemasters soared 19.1% after Electronic Arts said it would buy the video game developer in a deal worth $1.2 billion, trumping an earlier agreement between the British company and rival Take-Two Interactive Software . (Reporting by Shivani Kumaresan in Bengaluru; Editing by Arun Koyyur)

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