UPDATE 2-UK's FTSE 100 closes flat as virus woes offset healthcare boost

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* FTSE 100 up 0.1%, FTSE 250 down 0.7%

* Healthcare stocks jump to hover near record high

* Direct Line gains as motor insurance claims drop

* Ocado jumps as home delivery demand boosts retail sales
(Updates with market closing)

By Devik Jain and Sagarika Jaisinghani

May 6 (Reuters) - 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 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)