* FTSE 100 up 0.7%, FTSE 250 up 0.5%
* Oil stocks, financials biggest boosts on main index
* Informa gains after trading update
* Royal Mail jumps on rating upgrades
* Mothercare jumps after FY results
(Adds analyst comments, graphic, updates to closing prices)
By Muvija M and Helen Reid
May 24 (Reuters) - Britain's FTSE 100 held its gains on
Friday after Prime Minister Theresa May announced her
resignation date as head of her party in a widely expected move
that nevertheless raises the prospect of a successor likely to
seek a more hardline Brexit deal.
The FTSE 100 .FTSE added 0.7% and the midcap index .FTMC
rose 0.5%, slightly off its opening levels, as traders and
investors said the market had already priced in May's move when
rumours first started circulating.
Housebuilders, considered prone to any hit to the economy
from a chaotic "no-deal" departure from the European Union,
barely budged after May's speech. "It's been so well-flagged and UK assets have been hammered
all week. Realistically we know no more or less than we did
yesterday," said a trader.
Housebuilders, retailers, domestic banks and other
Brexit-sensitive stocks fell sharply earlier this week when
pressure grew on May and investors grappled with the likelihood
of Boris Johnson, who wants a tougher divorce deal, as her
successor.
The former foreign secretary is favourite to win the
Conservative party leadership contest, according to Oddschecker.
May will step down as prime minister once the new party leader
is chosen, expected in July.
"Theresa May's announcement ... comes as no surprise, but it
could lead to a chain reaction that will ultimately be negative
for UK market sentiment," said Seema Shah, senior global
investment strategist at Principal Global Investors.
"At this stage the extreme results of either no deal or no
Brexit seem more likely than a negotiated managed Brexit."
Risk appetite more broadly returned to markets after U.S.
President Donald Trump predicted a swift end to the trade
dispute with China. Miners .FTNMX1770 , which broke a four-day losing streak,
provided the biggest boost to the main bourse after copper
prices rebounded as the dollar dipped. Event manager Informa INF.L added 2.5% after an upbeat
trading update, while BT BT.L lost 1.1% after regulator Ofcom
said the telecoms group will be forced to give rivals greater
access to its core network Openreach. Among midcaps, Royal Mail RMG.L jumped 6.4% on its best
day in 5-1/2 years after two brokerage firms upgraded the stock
following results earlier this week in which the company
detailed its turnaround plan.
Mothercare MTC.L surged 8.3% after its annual report
showed restructuring efforts were paying off. Small-cap media firm Tarsus TRS.L shot up by 38% after
European private equity firm Charterhouse said it had made a
cash bid valuing the company at about 561 million pounds.
Concern over a possible no-deal Brexit, along with an
escalation in the trade war between Washington and Beijing, have
left the FTSE 100 on course for its first monthly drop this
year.
Rating agency Moody's as well as Goldman Sachs hiked the
chances of a potentially chaotic no-deal Brexit following May's
resignation as Conservative leader. "May's successor will likely take a harder stance on Brexit
and would potentially resurrect the spectre of a no-deal exit as
a negotiating tool, although it remains to be seen if they would
carry through with the threat," analysts at S&P wrote.
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Performance of UK indexes since Theresa May took over as PM https://tmsnrt.rs/2X3MFcm
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