The FTSE 250 <.FTMC>, up more than 3% since last week amid a flurry of contrasting Brexit headlines, shed 0.5% as sterling slipped after the DUP said it could not back the Brexit deal as it currently stands.

The FTSE 100 snapped a three-day losing run and edged 0.2% higher by 0800 GMT, helped by a rebound in oil majors Shell and BP after days of sell-off.

Unilever added 1.5% after its quarterly update and, along with fellow exporter firms, benefited from a weaker pound to further support the main index.

Mid-cap Grafton slid 12%, on track for its worst day since June 2016, after it warned on its annual profit due to weak demand in the UK and delays in new construction permits in the Netherlands.

Peers Travis Perkins, Howden Joinery and SIG gave up between 2% and 5.4%.

Housebuilders such as Barratt, Taylor Wimpey and Berkeley fell on a combination of Grafton's warning and downbeat Brexit sentiment.

"Brexit has moved to the season finale it seems," said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.

Britain and the EU seemed to be on the verge of a deal on Wednesday and European Council President Donald Tusk said that the basic foundations of the agreement were ready.

But, CMC Markets' Michael Hewson warned that progress could get "a little tricky", as doubts remain over whether or not British lawmakers will approve the deal at a special parliamentary session on Saturday.

"Looking at options markets, dealers started adding more premium on the short side than the long side after the DUP statement," said Hussein Sayed, chief market strategist at FXTM.

News-driven moves saw Moneysupermarket.com tumble 9% to a six-month low after a trading update. Liberum analysts said its insurance and money divisions underperformed.

Britain's biggest pizza delivery company Domino's jumped nearly 6%, however, on plans to exit its international markets.

Shares of Hargreaves Lansdown fell 3.4% to the bottom of the blue-chip index. The Financial Times reported that UK's financial watchdog was examining the firm's role after the collapse of money manager Neil Woodford's flagship funds.

(Reporting by Shashwat Awasthi in Bengaluru; Editing by Shounak Dasgupta)

By Shashwat Awasthi