Last checked at 
LONDON (Alliance News) - UK stocks are trading mixed Wednesday, as investors remain wary ahead of major risk events still to come this week, in the form of the European Central Bank policy decision on Thursday and the US jobs report on Friday.
By mid-morning Wednesday, the FTSE 100 is down 0.4% at 6,810.32, the FTSE 250 is flat at 15,972.60, and the AIM All-Share is up 0.3% at 810.34.
"Markets have become increasingly cautious as the week has progressed," said Hantec Markets market analyst Richard Perry. "This is in front of what could be a potentially profound ECB monetary policy meeting and not forgetting non-farm payrolls."
In Europe, major markets are being held back by the same concerns, as well as some further disappointing purchasing managers index readings - this time from the service sector, following the negative revision of the manufacturing numbers earlier in the week.
The French CAC 40 is down 0.6% and the German DAX is down 0.3%.
Markit has confirmed that the French service sector PMI slipped back into contraction in May, with a PMI reading of 49.1, down from 50.4 in May and slightly lower than the flash estimate of 49.2. The German number was also revised lower to 56.0 from the flash estimate of 56.4, although that confirmed expansion in Europe's largest economy from the 54.7 reading recorded in April.
The eurozone wide service sector PMI was revised down to 53.2 in May from the flash estimate of 53.5, remaining slightly higher than the 53.1 recorded in April. The eurozone composite PMI, covering the manufacturing and service sectors was revised down to 53.5 in May, from the flash estimate of 53.9, and the April reading of 54.0.
Eurozone first-quarter GDP was unrevised by Eurostat Wednesday, remaining at 0.9% year-on-year, and 0.2% on a quarterly basis.
While foreign exchange majors also remain in fairly tight ranges ahead of both the European and UK central bank meetings Thursday, the pound jumped to a session high against the dollar and the euro following the release the UK service sector PMI from Markit, which was stronger-than-expected and continues to outshine the eurozone.
The PMI reading came in at 58.6 in May, fractionally lower that the recent high recorded in April at 58.7, but exceeding economist expectations for a print of 58.2.
"The UK economic engine keeps running red hot," said Bernenberg senior economist Christian Schulz. "Services and construction PMIs may have fallen a bit below their peaks in recent months, but the speed of the economic recovery remains very impressive."
The pound rose against the dollar to a high of USD1.6749, and against the euro of EUR1.2290.
UK supermarkets have been in focus Wednesday after Tesco released a first-quarter trading update highlighting the ferocity of the price war in the sector. Tesco posted a 3.3% like-for-like decline in sales including petrol for the quarter ended May 24, and a 3.2% fall excluding petrol. It was hardest hit in the UK, where like-for-like sales in the business were down 3.8% including petrol, and 3.7% excluding petrol.
"The drop in UK sales is exactly what we expected as we increased our store refresh programme and because of deep discounting," Tesco Chief Executive Philip Clarke told journalists in a call Wednesday. "We haven't seen a quarterly like-for-like performance like this before, but we have also not seen competition like this before in the industry."
Tesco shares are down 1.6%, while Sainsury's, which reports its own first-quarter numbers next week, is down 2.0%, and Morrison is down 0.9%.
A number of the biggest fallers have gone ex-dividend Wednesday, with National Grid leading the FTSE 100 lower, down 4.9% after going ex a GBP0.2754 per share full-year payment, and WPP down 2.0% after going ex a GBP0.2365p interim dividend.
In the FTSE 250, Evraz leads the fallers, down 4.0% after going ex a USD0.06 full-year dividend, while other ex-div names include Laird, Cineworld, and Debenhams.
Packaging group RPC is a top gainer Wednesday, up 4.3% and leading the FTSE 250 gainers after reporting a 22% increase in its full-year pretax profit. The company made a GBP59.0 million pretax profit in the year ended March 31, compared with GBP48.2 million a year earlier.
Real estate investment trust Workspace Group is also performing well in the FTSE 250 Wednesday, up 4.3% and leading the FTSE 250 higher after announcing a 43% year-on-year growth in its net asset value. The groups saw significant yield acceleration in the second half of the year and Liberum capital says it is "only now hitting its late-cycle sweet spot."
Still to come Wednesday, investors will be watching for any surprises from the Queen's Speech this morning, before the focus switches to US data.
The ADP employment change report, normally seen as a warm-up for the monthly non-farm payroll report on Friday, is due at 1315 BST. Economists expect the ADP report to show an extra 210,000 people in employment in in May.
Both the Markit and ISM non-manufacturing PMI's are due at 1445 BST and 1500 BST respectively, with both expected to show improvements in May.
Ahead of the data, futures trading indicates that US stocks will follow those in Europe lower, with a softer open on Wall Street expected.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
Copyright 2014 Alliance News Limited. All Rights Reserved.
