* AstraZeneca biggest drag on FTSE 100, retreats from record peak
* Ted Baker surges after quarterly earnings update
* Ladbrokes owner slumps as UK tax office expands probe
* BHP falls on warning of demand hit
* Energy majors gain on strong oil prices (Updates to close)
By Sagarika Jaisinghani and Ambar Warrick
July 21 (Reuters) - London midcap stocks tracked European markets higher on Tuesday after bumper stimulus measures from the European Union, while a slight pull-back in the healthcare sector on uncertainty over a coronavirus vaccine weighed on the blue-chip index.
The mid-cap FTSE 250 closed 0.7% higher at a two-week peak, tracking gains in European shares after EU leaders agreed on a stimulus package to bolster economic growth through the COVID-19 pandemic.
The blue-chip FTSE 100 ended up 0.1%, as gains in energy were offset by drugmaker AstraZeneca. The stock retreated from life-time highs after the lead developer of its vaccine expressed caution over when the vaccine could be rolled out.
Positive data from a series of vaccine tests had driven stocks higher on Monday. Local stocks have also been cheered by the British government's relaxation of virus-driven curbs on activity to try to drive an eventual economic recovery.
"A vaccine could provide a more durable solution to the coronavirus crisis, but we have now learned enough about the virus to say that we think policymakers are unlikely to re-impose national lockdowns to control the spread of COVID-19," UBS analysts wrote in a note.
The focus has turned to quarterly corporate earnings updates to gauge the pace of a post-pandemic business recovery.
BHP Group, the world's largest miner, and rival Rio Tinto weighed on the FTSE 100 after the former reported higher quarterly iron ore output, but warned of a hit to demand for the material from the outbreak.
Ted Baker soared 14.4% after the struggling fashion retailer said it performed better than expected in the 11 weeks to July 18.
Ladbrokes owner GVC Plc marked its worst day since early-April after saying British tax authorities had expanded an investigation into the gambling company's former online business in Turkey to include unidentified entities within the group. (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sherry Jacob-Phillips and Barbara Lewis)