Dec 24 (Reuters) - UK shares rose on Thursday as Britain and the European Union inched closer to striking a post-Brexit trade deal, averting a chaotic separation with only seven days left for the transition period to expire.
The blue-chip FTSE 100 rose 0.4% by 0809 GMT with a jump in sterling keeping gains in check.
Brexit-sensitive banks and homebuilders were among the top gainers on the index, with Lloyds Banking Group, Taylor Wimpey and Persimmon rising the most.
The domestically focused FTSE 250 index, considered a proxy to Brexit sentiment, jumped 0.7% to hit a fresh February high.
Sources in London and Brussels said a deal was on the cusp of being struck as British Prime Minister Boris Johnson held a late-night conference call with his Cabinet of senior ministers, and negotiators in Brussels pored over reams of legal trade texts.
UK markets will close early on Thursday and remain closed for Christmas and Boxing Day on Friday and Monday.
(Reporting by Shivani Kumaresan in Bengaluru; Editing by Subhranshu Sahu)