*

FTSE 100 gains 0.2%, FTSE 250 ends flat

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Asking prices for UK homes drop, but July sales hit 5-year

high

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Dr Martens ( DOCMF ) gains after Peel Hunt upgrades stock

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Babcock jumps after RBC initiates coverage with

'outperform'

(Updates with closing levels)

Aug 18 (Reuters) - Britain's FTSE 100 closed higher on

Monday, propelled by gains in healthcare and defence stocks,

while investors kept a watch on U.S.-brokered peace talks aimed

at ending the Russia-Ukraine war.

The blue-chip FTSE 100 finished 0.2% up after

dipping earlier in the session. However, the benchmark was still

well below Friday's intraday record high.

The midcap FTSE 250 ended little changed.

Geopolitics dominated market sentiment as investors awaited

U.S. President Donald Trump's meeting with Ukrainian President

Volodymyr Zelenskiy and European leaders, due later in the day.

Trump is pressing for a quick end to the Russia-Ukraine war,

with Kyiv and its allies fearing pressure to accept terms

favoring Moscow after his Friday's summit with Russian

counterpart Vladimir Putin.

Energy sector, which closed 0.5% lower,

remained in focus, with oil markets being sensitive to

Washington's signals on secondary sanctions on Russian oil.

Heavy-weight healthcare shares primarily

drove Monday's advances, rising 1.2%.

Aerospace and defence sector began the week

on a strong footing, advancing 1.2%, with Babcock International

Group ( BCKIF ) jumping 5.3% after brokerage firm RBC Capital

Markets initiated coverage at "outperform" rating.

Meanwhile, industrial metal mining companies

weakened 2.2%, as a stronger U.S. dollar weighed on metal

prices.

A gauge of Britain's homebuilders closed near

1% lower after a survey showed that asking prices for newly

advertised British properties fell in the four weeks to

mid-August, though less notably than in previous months. July

sales reached their highest level for that time of year since

2020.

Looking ahead, investors await Wednesday's crucial UK

inflation report, which could provide greater clarity on the

country's economic health.

Additionally, global markets will focus on Thursday's

Jackson Hole symposium, where U.S. Federal Reserve Chair Jerome

Powell may offer insights into future interest rate directions

for the world's largest economy.

Among single stocks, bootmaker Dr Martens ( DOCMF ) gained

8.5% after brokerage firm Peel Hunt upgraded the stock to "buy"

from "add".