By Devik Jain and Sagarika Jaisinghani

London's FTSE 100 closed nearly flat on Wednesday as record gains for healthcare stocks offset growing evidence of the economic damage from the COVID-19 pandemic and escalating U.S.-China tensions.

The blue-chip index rose just 0.1%, with drugmaker AstraZeneca Plc providing the biggest boost after it won U.S. approval for its diabetes drug as a treatment for heart failure.

The wider pharma & biotech index <.FTNMX4570> rose 2.9% to touch a record high.

The domestically focussed midcap stocks fell 0.7% along with broader European equities as worrying economic data and doubts about the easing of lockdowns weighed on investors' mood.

Data released earlier showed Britain's construction sector in April suffered by far its biggest contraction since the launch of a survey of the industry 23 years ago as the lockdown shuttered building sites and suppliers.

The British government is expected to lay out plans to relax coronavirus-induced restrictions on Sunday, Prime Minister Boris Johnson said, adding that he hopes some measures could come into force the next day.

"At the moment, it can be said that the pandemic has been brought under control to some extent, although the way back to normal life is likely to be a very long one," said Milan Cutkovic, market analyst at AxiCorp.

Mall operator Hammerson Plc plunged 14.3% to the bottom of the midcap index after saying it had terminated its 400 million pound ($497.20 million) deal to sell seven retail parks to private equity firm Orion.

Shares in other real estate firms, including Derwent London, Land Securities and Intu Properties, fell between 2.9% and 3.4%.

Oil companies, banks and travel stocks were among the biggest drags on the blue-chip index.

The FTSE 100 kicked off May on a dour note last week following a strong rebound in April as investors feared the halt in business activity due had pushed the global economy into a deep recession.

The scale of damage will become evident when the Bank of England publishes its quarterly projections after the monetary policy meeting on Thursday, although policymakers are expected to refrain from further action after they cut interest rates to a record low in March.

Simmering U.S.-China tensions also added to the downbeat mood after U.S. President Donald Trump urged China to be transparent about the origins of the coronavirus.

Among gainers, online supermarket Ocado jumped 5.6% after saying that its retail revenue soared 40.4% year-on-year so far in the current quarter on higher demand for home deliveries.

British broadcaster ITV tacked on 3% after announcing cost-cutting plans even as its ad revenue plunged 42% due to coronavirus crisis.

Car insurer Direct Line Insurance Group Plc rose 4.5% after it reported a 70% drop in motor insurance claims for April as lockdown kept cars off roads.

(Reporting by Devik Jain, Sagarika Jaisinghani and Sruthi Shankar in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)