Travel stocks lift UK shares higher; investors unmoved by fresh tariff threats

By Sanchayaita Roy

Sept 26 (Reuters) - London stocks inched up on Friday, lifted by gains in travel and leisure shares, while investors showed little reaction to fresh tariff threats from U.S. President Donald Trump.

The benchmark FTSE 100 .FTSE gained 0.38% at 0926 GMT and headed for a marginal weekly gain.

The mid-cap FTSE 250 .FTMC rose 0.06% and was also on track for a weekly gain.

Travel and leisure .FTNMX405010 stocks rose 1.1%, led by InterContinental Hotels Group's IHG.L 2.9% gain after JPMorgan double upgraded it to "overweight" from "underweight". IHG was the top percentage gainer on the FTSE 100.

Premier Inn-owner Whitbread WTB.L gained 1.1%, while JD Wetherspoon JDW.L rose 1%.

Oil and gas sub-index .FTNMX601010 rose modestly, tracking gains in oil prices. O/R

Heavyweight Shell SHEL.L was up 1%, boosting the FTSE 100.

Meanwhile, trade tensions resurfaced after Trump on Thursday unveiled a fresh round of punishing tariffs on a broad range of imported goods, including 100% duties on branded drugs and 25% levies on heavy-duty trucks, set to come into force next week.

Britain said on Friday it was engaging with Washington over the pharmaceutical measures, hoping for a favourable outcome.

European healthcare stocks were flat after earlier falling as much as 0.8%. But British pharma and biotech sub-index .FTNMX201030 rose 0.3%.

"AstraZeneca could be better placed than some of its European rivals, due to promised extra investment in the U.S.," said Kathleen Brooks, research director at XTB, also highlighting Trump's promise to treat the UK differently on these tariffs.

"The FTSE 100 could be a relative 'safe haven' in the middle of this latest tariff storm."

Among individual stocks, British engineering firm Babcock BAB.L rose 1.7% after brokerage Berenberg raised its target price on the stock.

Later in the day, focus would turn to a key inflation reading in the U.S. that could help assess the Federal Reserve's future policy path.

Markets had been betting on aggressive interest rate cuts by the Fed this year, though strong U.S. economic data have led to some trimming in optimism.

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