UPDATE 2-FTSE 100 plunges to 6-month low on China's trade threat

* FTSE 100 down 1.1%, FTSE 250 down 0.5%
* Oil and financials biggest drag on main index
* Ex-dividend trading weigh on FTSE 100
* Plus500 advances after executives buy shares
* Kaz Minerals falls on cautious short-term copper outlook

(Adds news items, analyst comments, updates share prices to
close)
By Muvija M and Yadarisa Shabong
Aug 15 (Reuters) - London's FTSE 100 tumbled to a six-month
low as China's warning to counter the latest U.S. tariffs fanned
trade tensions, while the more domestically focused midcap index
fared better in comparison, amid investors' hopes of averting a
no-deal Brexit.
The FTSE 100 index .FTSE shed 1.1%, lagging its European
peers, with losses led by oil majors and financial stocks.
Shell RDSa.L , the largest company on the index by market
value, was the biggest drag with a 3.2% drop as the stock traded
ex-dividend, while crude prices also fell. O/R
While the FTSE 250 index .FTMC earlier hit a near
seven-month low, the index clawed back some of the early losses
to close 0.5% lower on the back of a rise in sterling.
Gains for the local currency was brought on by news that the
opposition Labour Party was mounting a bid to bring down Prime
Minister Boris Johnson and stop him taking Britain out of the EU
without a deal.
However, global trade tensions were very much in play after
China vowed retaliation against the latest U.S. tariffs on $300
billion of Chinese goods. The fears were briefly kept in check
earlier in the week when the Trump administration delayed
tariffs on some of the goods. China's reaction on Thursday dragged an index of miners
.FTNMX1770 down 2% to its lowest since January over concerns
about global demand amid the painful trade war.
Blue-chip stocks trading ex-dividend, such as HSBC HSBA.L
and pension buyout specialist Phoenix Group PHNX.L also
weighed on the index, while fears of a recession persisted with
the Gilt yield curve remaining inverted on Thursday.
"That (drop in financial stocks) isn't a surprise given the
compression in the UK government bond yields, and bank's
profitability is usually hit in lower interest rate
environments," CMC Markets analyst David Madden said.
Both UK indexes had incurred steep losses in the previous
session as investors rushed to dump risky assets after the
10-year bond yields fell below two-year equivalents for the
first time since the financial crisis. If losses hold, the FTSE 100 would suffer its biggest
monthly fall in more than seven years.
Utilities and tobacco stocks British American Tobacco
BATS.L and Imperial Brands IMB.L eked out gains as investors
rushed to the so-called defensive stocks.
A warning from Asda, the British supermarket unit of retail
giant Walmart WMT.N , that Brexit uncertainty was affecting its
customers took down shares in Just Eat JE.L , Sainsbury's
SBRY.L and Tesco TSCO.L .
Among midcaps, online trading platform Plus500 PLUSP.L
surged 9.6% after some of its top executives bought shares in
the company.
Kaz Minerals KAZ.L slumped 15% after the miner took a
cautious stance on the short-term outlook for the copper market
amid concerns over the prolonged Sino-U.S. trade war and a
slowdown in China. AIM-listed Burford Capital BURF.L , the litigation
financing specialist caught in a stand-off with short-seller
Muddy Waters, jumped 13% after it appointed a new finance chief.