UK’s midcaps record best quarter in more than four years, blue-chip index down

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(Reuters) -The blue-chip FTSE 100 ended lower on Monday as a relief rally driven by easing geopolitical tensions and U.S. tariff concerns fizzled out, while UK’s midcap index logged its largest quarterly gain in nearly five years.

The internationally-focused FTSE 100 lost 0.4%, while notching its second consecutive quarterly gain. The mid-cap FTSE 250 closed down 0.4% on the day while recording a quarterly gain of just over 11%.

Domestically focused midcap stocks have been relatively insulated from tariff disruptions, as they have lower exposure to international trade. The UK also remains the only country with a trade agreement with the United States.

The FTSE 100 has gained more than 7% so far this year, already exceeding its annual gains recorded since 2021.

For the month, the FTSE 100 lost 0.1%, while the midcap FTSE 250 index gained 2.8%.

Aerospace and defence stocks were up 1.2%, boosted by a 1.4% gain in Rolls-Royce (OTC:RYCEY), after the U.S.-UK trade deal came into effect, effectively removing the 10% tariff on aircraft engines and parts.

Investors are closely monitoring further U.S. trade agreements ahead of President Donald Trump’s July 9 deadline.

Data showed Britain’s economy grew at its fastest pace in a year during the first quarter of 2025; however, analysts expect growth to slow for the rest of the year.

Among individual stocks, WH Smith fell 3.4% after the company said it would receive less cash than expected from the sale of its UK high street business to Hobbycraft owner Modella Capital.

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Pharmaceutical giant GSK was down 1.1% after a U.S. senator said Friday she was launching an investigation into the company’s discontinuation of a widely used asthma inhaler for children.

Gas owner Centrica (OTC:CPYYY) fell 1.2% after J.P. Morgan downgraded its stock.

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