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, 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.

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 fell 1.2% after J.P. Morgan downgraded its stock.

(Reporting by Twesha Dikshit and Ankita Yadav; Editing by Tasim Zahid and Ros Russell)