Updates with market close

March 5 (Reuters) - British shares stabilised on Wednesday after a sell-off in the previous session, as investors looked for any possible reprieve from U.S. tariffs.

The blue-chip FTSE 100 .FTSE closed flat, while the domestically focussed FTSE 250 .FTMC climbed 0.9% after notching its worst session in seven months on Tuesday. The small cap index .FTSC gained 0.7%.

Helping limit gains in the FTSE 100, sterling GBP=D3 jumped to a four-month high against the dollar, weiging on dollar earners such as Unilever ULVR.L and British American Tobacco BATS.L. A sharp drop in oil prices LCOc1, CLc1 also dragged down energy major Shell SHEL.L. O/R

The blue-chip index fell from record highs in the prior session after U.S. President Donald Trump's new tariffs on top trading partners took effect.

However, comments from the U.S. Commerce Secretary about possible exemptions to Mexican and Canadian duties kept hopes for negotiations afloat.

Trump's comments that Ukraine was ready to negotiate for an end to the war with Russia also helped lift sentiment, after a sharp clash with President Volodymyr Zelenskiy last week.

The index tracking precious metal miners .FTNMX551030 leapt 4.6%, the biggest sectoral gainer. Financial shares also lifted the FTSE 100, with the bank sector .FTNMX301010 up 1.8% after dropping more than 3% on Tuesday.

British bond prices GB10YT=RR dropped, tracking a sell-off in longer-dated German bonds, after the parties hoping to form the new German government agreed to overhaul borrowing rules and increase government spending, particularly on defence.

The British defence sector .FTNMX502010 rose 3.1%. Other economically sensitive sectors also gained, with construction and materials .FTNMX501010 as well as travel and leisure .FTNMX405010 up more than 1% each.

On the data front, the UK S&P Services Purchasing Managers' Index slipped slightly to 51 in February from 51.1. The survey showed services firms cut staff at the fastest pace since 2020 ahead of next month's tax and minimum-wage hikes.

Among individual stocks, shares of Games Workshop GAW.L rose 3.2% after the miniature wargame maker forecast 2025 profit above expectations.

Quilter QLT.L climbed 6.6% after the wealth manager beat annual profit expectations and set aside a smaller-than-expected 76 million pound ($97 million) cost provision for its ongoing advice review.

(Reporting by Lisa Mattackal and Sruthi Shankar in Bengaluru; Editing by Shreya Biswas and Alex Richardson)

((LisaPauline.Mattackal@thomsonreuters.com;))

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