By Sruthi Shankar

(Reuters) -Britain’s main stock indexes closed lower on Thursday, with the blue-chip FTSE 100 hit by a slump in healthcare stocks and the midcap index slipping from two-month highs as the prospect of higher U.S. interest rates kept investors wary.

The FTSE 100 dropped 0.6%, with drugmaker GSK sliding 10.1% in its second day of sharp falls on growing investor concerns about U.S. litigation focused on a heartburn drug that contained a probable carcinogen.

Haleon, GSK’s recently spun off consumer health unit, dropped 4.9%.

Deutsche Bank strategist Emmanuel Papadakis said in a note that the company could face a “short-term headwind” with from billions of dollars in potential liability “coupled with negative headlines from the slate of imminently pending cases.” .

Wall Street indexes edged higher after a rally the previous session, as signs of cooling inflation reduced bets of a supersized rate hike by the Federal Reserve next month. Policymakers said they will keep tightening monetary policy until price pressures are fully broken.

“Market pricing suggests that investors are more dovish than what we would expect the Fed to deliver,” said Karim Chedid, BlackRock’s head of investment strategy for its iShares unit in the EMEA region. “You could see more volatility in rate and equity markets.”

A stock market rally since June lows has helped drive the FTSE 100 and the midcap FTSE 250 near two-month highs, but many strategists doubt if the gains can sustain amid growing concerns of a recession.

Focus will now be on the preliminary reading of Britain’s GDP on Friday, expected to show a contraction during the second quarter.

London-listed shares of Antofagasta slipped 2.2% after the Chilean miner reported a fall in half-year profit.

Rio Tinto fell 3.7% as the miner traded without entitlement to the latest dividend payout.

The domestically focussed FTSE 250 index ended down 0.3%.

UK-listed shares of Dubai-based payments processor Network International jumped 16.2% as it announced a stock buyback programme and reported strong half-year results.

(Reporting by Sruthi Shankar in Bengaluru; additional reporting by Aniruddha Ghosh; Editing by Uttaresh.V, Shailesh Kuber and David Gregorio)