UPDATE 1-FTSE 100 loses ground as exporters slip, Rolls-Royce tumbles

* FTSE 100 down 0.3%, FTSE 250 rises 0.4%

* Rolls-Royce falls on repair delay

* Dollar earners weigh on main index

* BAT also drops on report
(Adds news items, analyst comment, updates share prices)

By Yadarisa Shabong

Sept 20 (Reuters) - Britain's top share index edged lower on
Friday as exporter stocks weakened on the back of gains in
sterling driven by rising hopes of a Brexit deal, while
Rolls-Royce tumbled after delays to repairs of its Trent 1000
engines.

The FTSE 100 was down 0.3% by 0815 GMT, while the
domestically focused FTSE 250 index was 0.4% higher as
it tracked gains in the local currency.

Hopes Britain could yet strike a deal to exit the European
Union after European Commission President Jean-Claude Juncker
said on Thursday one was possible helped the pound extend
overnight gains versus the dollar to a two-month high.

Dollar earners such as British American Tobacco,
Unilever and HSBC weighed on the main index.

BAT also fell on a Dutch media report on tax liabilities and
worries over stricter regulatory clampdowns in the United
States, according to traders.

Rolls-Royce tumbled 3.6% after the engine-maker said
it expects problems with its Trent 1000 engines to take longer
than expected to fix.

However, housebuilders, which are sensitive to
an economic impact of a no-deal Brexit, cushioned losses on the
main index.

Blue-chips Persimmon, Barratt Development
and Taylor Wimpey added between 3.5% and 4.5%.

Still, the main bourse is set to end the week in negative
territory after three straight weekly gains.

"It's not shaping up to be the most thrilling session, in
what has turned into a rather damp-squib second half of the
week, the markets struggling for direction following the Fed's
mixed bag statement on Wednesday evening," Spreadex analyst
Connor Campbell said.

Mid-cap Investec gave up 5.8% after the investment
bank warned of lower profit in the first half as it grapples
with higher restructuring costs and "challenging" market
conditions.

Investec shares were headed for their worst day this year.

Thomas Cook plunged 20% to a new all-time low after
the travel firm said an extra 200 million pounds ($251 million)
had been requested by stakeholders in talks to finalise the
restructuring plan to save the company.

Keller Group shed 5.4% after the engineering
contractor flagged that trading in North America in the second
half of the year has started "more slowly than previously
expected".

Royal Bank of Scotland climbed 2%. The bank
appointed Alison Rose as its new chief executive, becoming the
first major British lender to appoint a woman to its top job.
(Reporting by Yadarisa Shabong in Bengaluru
Editing by Andrew Heavens and Jan Harvey)