By Shristi Achar A and Johann M Cherian
(Reuters) -Britain's FTSE 100 fell on Wednesday, closing at a near three-week low as the pound weighed on pharmaceutical firms, though homebuilder Persimmon (LON:PSN) advanced after reporting robust quarterly results.
Persimmon Plc gained 4.9%, logging its best day in more than two months, after it said it expected to build homes at the top end of its annual guidance range. However, it also noted that cost inflation showed limited signs of easing in the short-term.
The larger homebuilders sector added 3.3%.
"Positive earnings are going to keep the momentum going for the short term," said Daniela Hathorn, senior market analyst at Capital.com.
"With recession looming and interest rates rising, that's obviously going to weigh on home sales and mortgage lending into the future."
The blue-chip index ended 0.5% down for the third straight session, while the mid-cap FTSE 250 shed 0.04%.
GSK Plc began 2023 with a quarterly performance that beat analyst expectations, but the drugmaker's shares fell 3.9%, tracking declines among European peers.
Also hurting healthcare stocks, the European Union published a draft of its proposed overhaul of laws governing the EU's pharmaceuticals industry, setting up a tussle with drugmakers which warn they will invest and innovate elsewhere.
The broader healthcare sector lost 3.3% and weighed on the top FTSE 100 index as the pound climbed 0.5% hurting shares of export-focussed firms. [GBP/]
The FTSE indexes have had a good run earlier this month, buoyed by strength in commodity-linked stocks and defensives such as pharmaceuticals.
However, this week investors have begun to assess earnings from domestic firms and those in the U.S., ahead of the Federal Reserve's rate-setting meeting next month.
Among other moves, CRH (LON:CRH) Plc fell 3.3% as the building materials giant said the European market remained challenging amid expectations of a profit boost from its U.S. operations.
Reckitt Benckiser Group Plc (LON:RKT) lost 3.4% after naming company insider Kris Licht as its new CEO.
Standard Chartered (LON:STAN) PLC reported its first-quarter pre-tax profit beat expectations, sending its shares up 2.2%.
The broader banking sector rose 1.1%.
Drax Group (LON:DRX) Plc's shares rose 1.7% after the power generator announced a 150 million pound ($187 million) share buyback programme.