LONDON MARKET MIDDAY: Risk Off, Pound Weak As UK PM Seen Leaving No 10

LONDON (Alliance News) - Risk appetite faded on Thursday as the FTSE 100 shed over a 100 points, with ex-dividend stocks among those dragging on the index. The pound continued to trail lower as speculation over UK Prime Minister Theresa May's future remained rampant following the resignation of Commons leader Andrea Leadsom last night and ahead of the outcome of European Parliament elections, with the Conservatives braced to be also-rans. The FTSE 100 was down 100.64 points, or 1.4%, at 7,233.55 Thursday midday. The mid-cap FTSE 250 was down 261.48 points, or 1.4%, at 19,045.79. The AIM All-Share was down 0.7% at 959.45.The Cboe UK 100 index was down 1.5% at 12,262.44. The Cboe UK 250 was down 1.4% at 17,132.19, though the Cboe UK Small Companies was up 0.1% at 11,817.51.In European equities, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 1.8% and 1.9%, respectively. "The prospect of a speedy conclusion to the current tensions between the US and China continues to recede, and as such the caution of the last few days runs the risk of turning into a full-blown retreat from those sectors that are likely to be hit the hardest from further escalations," said Michael Hewson at CMC Markets. Stocks in the US are, in line with Europe, on course for a disappointing start. The Dow Jones and S&P 500 are both called down 1.0% while the Nasdaq is seen 1.4% lower.In the afternoon in the US is the Markit manufacturing and services purchasing managers' indices, both due at 1445 BST. This comes after PMI readings showed the pace of eurozone economic growth remained subdued in May amid stagnant demand. The eurozone flash manufacturing PMI fell further in May to 47.7 from 47.9 in April, while the services index decreased to 52.5 from 52.8. A reading above 50 indicates growth in the sector, while one below signals shrinkage.Among countries, Germany's manufacturing PMI slipped to 44.3 in May from 44.4 in April, though the composite PMI grew to 52.4 from 52.2.The French manufacturing PMI grew to 50.6 in Many from 50.0 in April and the composite PMI increased to 52.4 from 52.2 in previous month.The euro was quoted at USD1.1134 following the data, down from USD1.1156 at the equities close on Wednesday.The pound remained in the doldrums, quoted at USD1.2638 at midday versus USD1.2657 late Wednesday, as sterling traded around its lows for 2019. Theresa May's fate as prime minister looks set to be sealed on Friday when she meets the Tory party grandee who speaks for Conservative backbenchers.As her leadership crisis intensifies, May will hold discussions with Graham Brady, chair of the powerful 1922 Committee of Conservative MPs, with clamour growing for her to quit. Pressure has been mounting on the prime minister since Commons leader Andrea Leadsom stormed out of government in protest at the PM's EU withdrawal plan.May's meeting with the 1922 Committee chair looks pivotal to how her premiership ends.She has previously agreed to set out the timetable for the contest to replace her after a crunch vote on her Brexit deal, widely expected on June 7. However, that deadline appears to have been brought forward with the announcement she will meet Brady the day after the EU vote, in which polls suggest the Tories will be slammed by Nigel Farage's Brexit Party.CMC's Hewson said the "sands of time" appear to be running out for May and her time in No 10 Downing Street."While it is unlikely that the prime minister will go today, she could well be gone by Monday when it becomes apparent how badly the Conservative party has done in today's European poll," said Hewson.Among the stocks weighing on London's FTSE 100 at midday were ex-dividend stocks, with grocer Wm Morrison Supermarkets down 5.9% and tobacco major Imperial Brands down 2.7%.Intertek slipped 2.2% despite saying revenue growth in the first four months of 2019 had been "good", with the safety-testing firm on track to deliver margin expansion and strong cash flow.For the four months ended April, revenue grew 7.3% to GBP924.3 million from GBP861.2 million the year prior. At constant currency, this represented a 5.3% advance on the year prior.Sat atop the FTSE 250, though unable to stem broader losses in the index, was outsourcer Serco. Serco gained 9.6% after it agreed to buy Alion Science & Technology Corp's Naval Systems Business Unit for USD225 million. Serco plans to place up to 111.2 million shares - representing up to 10% of its existing share capital - via an accelerated bookbuild in order to raise GBP130 million to part-fund the deal. "The new US deal changes the shape of the group and means less reliance on the UK. This deal will give a boost to earnings which is another tick in the box for Soames. But strategically it is just as important as it increases Serco's percentage of revenue generated from the US from 20% to 26%," said Russ Mould, investment director at AJ Bell.Mitchells & Butlers was another gainer, up 6.6% after the pub operator said it outperformed the market in its first half.For the six months ended April 13, the company posted pretax profit of GBP75 million, up 8.7% from GBP69 million a year prior. Revenue rose 5% year-on-year to GBP1.18 billion from GBP1.13 billion, with like-for-like sales up 4.1% in the first half. For the 33 weeks to May 18, like-for-like sales were up 3.8%. Merlin Entertainments rose 6.4% to 353.80 pence after US activist investor ValueAct Capital urged the theme park operator to consider going private. In an open letter to Merlin Chair John Sunderland, ValueAct said: "Merlin's share price does not reflect the underlying value of the company and may not in the foreseeable future...Simply put: Merlin has struggled as a public company." ValueAct, which holds a 9.3% stake in the owner of Legoland, said Merlin could attract a bid of around GBP4 per share in a public or private transaction, a premium of roughly 30% to the current and recent average share price. QinetiQ was up 3.6% after the defence firm said annual revenue grew strongly alongside a healthy order book.For the year ended March, pretax profit narrowed 15% to GBP123.2 million from GBP144.8 million the year prior. This was despite revenue growing 9.4% to GBP911.1 million from GBP833.0 million the year before.Underlying pretax profit - excluding one-off items - widened 1.6% to GBP124.0 million from GBP122.1 million the year prior. Towards the bottom of the FTSE 250 index was AJ Bell, down 5.3%.In the six months to March 31, AJ Bell's pretax profit was up 27% to GBP17.7 million from GBP13.9 million the year before. The stockbroker's first half revenue was up 17% to GBP50.1 million from GBP42.9 million the prior year.The stockbroker's assets under management at the end of the period were up 3.5% from September 30, rising to GBP47.7 billion compared to GBP46.1 billion. B&M European Value Retail slipped 4.0% as it reported annual and profit growth but was cautious on its like-for-like growth expectations in the new year despite a bumper Easter. For the year ended March 30, the discount homewares retailer posted pretax profit up 8.7% to GBP249.4 million from GBP229.3 million a year prior. This was achieved on the back of revenue jumping 17% year-on-year to GBP3.48 billion from GBP2.97 billion.UK B&M store fascia revenue rose 8.7%, 0.7% on a like-for-like basis. Just in the fourth quarter, revenue for the company's store fascia was up 5.8%.B&M said its positive momentum has continued into the new financial year."We just achieved our best ever Easter trading season, with healthy positive like-for-likes, but it would be prudent to expect more moderate like-for-like growth in the full year as a whole," said Chief Executive Simon Arora.