Updated at 1610 GMT

By Khushi Singh and Lisa Pauline Mattackal

Oct 2 (Reuters) -The UK's benchmark FTSE 100 stock index edged higher on Wednesday, led by energy shares as oil prices jumped on concerns about tensions in the Middle East, though investors were cautious as they assessed the risk of escalating conflict.

The blue-chip FTSE 100 .FTSE was up 0.2%, while the more domestically focussed midcap FTSE 250 index .FTMC was down 0.6%.

Heavyweight oil and gas shares .FTNMX601010 rose 1.6%, closing at their highest in more than a week, as oil prices rose on concerns that crude output from the Middle East could be impacted following Iran's biggest ever military blow against Israel. O/R

Still, most investors seemed to avoid panic selling.

"Overall I'd say market reaction has been pretty muted. You saw some safe haven buying yesterday but a lot of that's being given back today," said Richard Flax, chief investment officer at Moneyfarm.

"Oil prices have gone up but are still sitting at around $70-ish a barrel, there's a lot of things where you'd think markets would be pricing in a lot more geopolitical tail risk than they seem to be."

The aerospace and defence index .FTNMX502010 rose 0.3%.

The industrial metal miners .FTNMX551020 gained 1.2% on higher copper prices, buoyed by brighter demand prospects after China's stimulus measures. MET/L

Insurer Prudential PRU.L topped the FTSE 100, rising more than 4%. Banking stocks .FTNMX301010 rose 0.7%.

The automobiles and parts index .FTNMX401010 led sectoral declines, down 2.8% and closing at a nearly two month low, as Aston Martin AML.L lost more than 7%, extending declines for a third consecutive session.

Among single movers, JD Sports Fashion JD.L tumbled 6.1% to the bottom of FTSE 100 after not updating its annual guidance despite beating the market outlook for first-half profit, and as shares of Nike, whose shoes it retails, slumped.

Elsewhere, pay settlements awarded by British employers held at their lowest in two years in the three months to August.

Reporting by Khushi Singh in Bengaluru; Editing by Rashmi Aich and Jan Harvey

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