Updates to market close

May 29 (Reuters) - UK indexes marked a second straight month of gains on Friday, buoyed by hopes that the U.S. and Iran were nearing a deal to extend their ceasefire.

The blue-chip FTSE 100 index .FTSE ended down 0.2% and posted monthly gains of around 0.3%. The midcap FTSE 250 .FTMC gained 0.4% on the day and 4.3% for May.

• Shares of Ocado OCDO.L soared 7.1% after supermarket group Asda struck a deal with the technology firm to overhaul its online business across the UK.

• Oil prices slipped nearly 2% after the U.S. and Iran reached an agreement to extend a ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources told Reuters. O/R

• President Donald Trump said he would make a final decision on Friday.

• Shares of oil majors Shell SHEL.L and BP BP.L were mixed. A broader gauge of British energy stocks .FTNMX601010 posted its biggest monthly drop in a year, as crude prices eased.

• Hopes of de-escalation in the U.S.-Iran conflict and easing bets on UK interest rate hikes have buoyed domestic stocks over the past two weeks.

• Bank of England Governor Andrew Bailey said that allowing inflation to run above the central bank's 2% target is justified given the economic uncertainty and reiterated that the BoE had tightened monetary policy by taking rate cuts off the table.

• Money market bets show traders are pricing in at least one 25 bps interest rate hike this year and see a 28% chance of another such move, down from 50% probability earlier this week.

• Shares in UK retailers B&M BMEB.L, Currys CURY.L, Dunelm DNLM.L, Wickes Group WIX.L dipped in the range of 0.9% and 2.4% after Deutsche Bank downgraded their ratings, citing weaker consumer spending and confidence.