Last checked at 
(Alliance News) - London stocks opened Wednesday's session on a downbeat note following worrying manufacturing data out Europe and the US on Tuesday.
Focus now turns to US ADP employment figures later in the day ahead of Friday's monthly jobs report, as traders fret about the health of the global economy.
London's headline stock index was lower in early trade despite Flutter Entertainment shares jumping on news of a GBP10 billion gambling merger with The Stars Group, as top-level departures at Tesco and Standard Life Aberdeen caused both stocks to slip.
The FTSE 100 index was down 66.32 points, or 0.9%, at 7,294.00 early Wednesday. The FTSE 250 was down 107.32 points, or 0.6%, at 19,765.50. The AIM All-Share was down 0.1% at 874.11.
The Cboe UK 100 index was down 0.9% at 12,378.35. The Cboe UK 250 was down 0.5% at 17,691.61 and the Cboe UK Small Companies up 0.2% at 10,971.67.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both 0.3% lower in early trade.
"Traders over in Europe are facing red screens, thanks to the massive sell-off over on Wall Street which was triggered due to the feeble economic reading: the US ISM data. Once again, investors have become anxious about the health of the global economic growth because yesterday's reading came on the heels of unsatisfactory figures from Europe which we saw earlier this week," said Naeem Aslam at Think Markets.
"The apprehensions about the weakness in the US economy have made investors stay on the sideline as they can smell blood on the street. The upcoming US ADP non-farm employment change report usually sets the tone for the US NFP data," he added.
ADP employment is out at 1315 BST ahead of Friday's eagerly-awaited non-farm payrolls report. Before this in Wednesday's economic calendar, there is a UK construction PMI reading at 0930 BST.
In Asia on Wednesday, the Japanese Nikkei 225 index ended down 0.5%. Financial markets in China are closed over this week to commemorate 'Golden Week', though the market in Hong Kong re-opened on Wednesday after the National Day holiday, and the Hang Seng stock index was flat in late trade.
In London in opening trade, shares in Tesco slipped 2.1% despite the grocer reporting a good start to the financial year.
"The numbers haven't disappointed, coming in better than expected, however they are likely to be overshadowed by the surprise announcement that CEO Dave Lewis is stepping down next year to be replaced by Ken Murphy, the CCO of Walgreens Boots Alliance," said Michael Hewson, chief market analyst at CMC Marets.
Lewis will leave the business next year, said Tesco, to be succeeded by Murphy, who executive vice president, chief commercial officer & president global brands at Walgreens Boots Alliance. As Murphy has contractual commitments to his previous employer, his start date at Tesco will be announced in due course, Tesco said.
Lewis said he decision to step down was a "personal one", adding that the tenure of a CEO should be "finite" and now is "the right time to pass the baton".
"Our turnaround is complete; we have delivered all the metrics we set for ourselves. The leadership team is very strong, our strategy is clear and it is delivering," said Lewis.
CMC's Hewson commented: "It is certain that Lewis will be missed...He certainly leaves the business in a better condition than which he found it, however it is telling that his successor hasn't come from within the existing management structure."
Turning to the results, revenue for the half year to August 24 rose 0.6% to GBP31.9 billion, while pretax profit increased 6.7% to GBP494 million. Like-for-like group sales were down 0.4%, with the UK & Ireland up 0.1% while Central Europe down 3.1% and Asia reported a 1.3% fall.
The supermarket chain said it has had a strong start to the year, leaving it "well-positioned to continue to be highly competitive in challenging markets".
Tesco added that its merger with wholesaler Booker continues to generate synergies ahead of plan, and it is confidence in reach its cumulative target of GBP140 million this year and GBP200 million by the 2021 financial year.
Flutter Entertainment shares jumped 14% after the gambling firm said it has agreed an all-share merger with Sky Bet-owner The Stars Group.
Under the agreement, expected the be completed in the second or third quarter of 2020, TSG shareholders will be able to receive 0.2253 Flutter shares for each Toronto-listed TSG share held. Flutter shareholders will own 55% and Star Group 45% of the combined firm, which will have a market capitalisation of over GBP10 billion, based on the two firms' current values.
On a proforma basis, the combined group's annual revenue would have been GBP3.8 billion in 2019, making it the largest online betting and gaming operator globally. The combined group will be incorporated, headquartered and domiciled in Dublin with a premium listing on the London Stock Exchange and a secondary listing on Euronext Dublin.
This is not Flutter's first bet on a major gambling tie-up. Flutter in 2015 - then known as Paddy Power - agreed to merge with Betfair in an all-share deal which completed in 2016. In May this year, Paddy Power Betfair changed its name to Flutter.
"The combination represents a great opportunity to deliver a step change in our presence in international markets and ensure we are ideally positioned to take advantage of the exciting opportunity in the US through a media relationship with FOX Sports as well as our development of US sports betting through Flutter's FanDuel and TSG's FOX Bet brands," said Flutter Chief Executive Peter Jackson.
"We are committed to these two high-quality brands to drive the growth of the combined group in the US," he added.
On a positive read-across following the M&A activity in the gambling space, William Hill was 5.5% higher in early trade and GVC holdings up 3.5%.
Standard Life Aberdeen, shares down 1.8%, said Vice Chair Martin Gilbert will not seek re-election at the company's annual general meeting in May next year, and will retire from the investment firm on September 30, 2020.
Gilbert founded Aberdeen Asset Management. He was previously co-CEO at Standard Life before the firm ended its joint leadership structure, which had been formed as a result of the merger between Standard Life and Aberdeen Asset Management.
In July, the Financial Times had reported that Gilbert would be stepping down from his role to become chair of digital bank Revolut.
Elsewhere on the LSE, Metro Bank hares jumped 7.2% on news Chair Veron Hill has decided to step down by the end of the year.
The challenger bank said its search for a new chair is progressing well, but if one has not been found by the end of 2019 it will appoint an existing independent non-executive director as interim chair.
"The board shares Vernon's view that Metro Bank has now reached a point where an independent Chairperson is appropriate to oversee the next stage of our journey," said Michael Snyder, senior independent director at Metro Bank.
In UK political news, Prime Minister Boris Johnson's plan for a Brexit deal will be delivered to Brussels on Wednesday with a message that there will be no delay beyond the October 31 deadline.
Johnson will use his speech at the Conservative Party Conference to say "we can, we must and we will" get Brexit done because voters feel they are being "taken for fools" by Westminster's politicians.
The prime minister will restate his commitment to the October 31 date despite legislation aimed at preventing him taking the UK out of the EU without a deal unless he has the consent of Parliament. It has also been reported Johnson will unveil a "two borders for four years" plan on Wednesday that will leave Northern Ireland in a relationship with Europe until 2025, according to The Daily Telegraph.
Sterling was quoted at USD1.2263 early Wednesday, firm compared to USD1.2251 at the London equities close on Tuesday.
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.