UPDATE 2-FTSE 100 hits 10-month high as weak pound spurs rate cut bets

* FTSE 100 up 0.7%, FTSE 250 up 0.6%
* Internationally exposed stocks lead on main index
* Defensive stocks also in demand
* Telford Homes gains after buyout offer

(Adds news items, analyst comments, updates share prices)
By Shashwat Awasthi
July 3 (Reuters) - Britain's main index rallied to a
10-month high on Wednesday as sterling fell after weak economic
data, which aided exporter firms, reinforced bets that the Bank
of England would cut interest rates and drove investors to
high-dividend stocks.
The FTSE 100 .FTSE rose 0.7%, scaling its highest level
since Aug. 29, boosted by shares of companies that book a major
chunk of their revenue overseas. The FTSE 250 .FTMC added
0.6%.
The pound struggled for traction after Bank of England
Governor Mark Carney said on Tuesday that the global trade war
and a 'no-deal' Brexit may warrant a near-term policy response,
which markets interpreted as a dovish signal. The currency's woes were compounded after Britain's
composite purchasing managers' index last month slipped into
contraction territory for the first time since mid-2016,
highlighting the mounting toll Brexit uncertainties have taken
on the economy.
Healthcare firms, consumer companies and utilities - a mix
of stocks that benefit from a weaker pound and are considered
"defensive" - were among the biggest boosts to the main index.
"There is certainly general interest in defensive names but
I think this is a global theme," Raymond James analyst Chris
Bailey said, while Cityindex analyst Ken Odeluga noted the
defensive rotation had "more to do with the nuance of sentiment
on the day".
Appetite for policy easing was stoked last month when
investors bet the U.S. Federal Reserve would cut interest rates
in response to slowing global economic growth, which helped the
FTSE 100 enjoy its best month since January.
AIM-listed Telford Homes TELF.L climbed 13% to 356 pence,
on their best day in almost 10 years, after U.S. real estate
firm CBRE CBRE.N said it would buy the British residential
property developer for 350 pence a share in cash. Shares of Flutter Entertainment FLTRF.L surged 11.5% to
their best day in more than a year. Though speculation about a
possible buyout persisted, the company said it was unaware of a
reason for the jump in its share price.
Supporting the mid-cap index was cyber security firm Sophos
SOPH.L , which advanced 8.2%, while peer Avast AVST.L rose
2.5%, after sources said chipmaker Broadcom AVGO.O was in
advanced talks to buy Symantec SYMC.O . Drinks makers fizzed amid hopes of a favourable review into
the so-called "sin taxes" on products high in salt, fat and
sugar to be promised by PM frontrunner Boris Johnson.
Shares of Britvic BVIC.L and sweetener maker Tate & Lyle
TATE.L rose 2%.