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* FTSE 100 up 0.4 pct; FTSE 250 up 0.1 pct
* PM May faces leadership challenge
* Superdry and Dixons dent confidence in retail sector
LONDON, Dec 12 (Reuters) - UK blue-chip shares were slightly higher on Wednesday on gains in British American Tobacco (LON:BATS), Rolls Royce (LON:RR) and companies with international earnings, as political chaos deepened following a leadership challenge to Prime Minister Theresa May.
The FTSE 100 .FTSE was up 0.4 percent at 0844 GMT, with HSBC, which makes a big chunk of its revenue abroad, the biggest contributor to the market's gains.
The more domestically focused midcap index .FTMC which makes 50 percent of its income from the UK, was flat in choppy trade as investors digested news that May faced a no confidence vote against her later in the day, the latest twist in the saga over the country's divorce from the European Union.
The pound was up 0.3 percent, suggesting traders reckon she will win the vote.
Mining stocks, BHP Group BHPB.L and Rio Tinto RIO.L , were among the top gainers in line with higher base metals prices, following U.S. President Donald Trump's upbeat comments about a trade deal with China, while the dollar held near a one-month peak against its peers.
Wood Group WG.L fell 6.2 percent to the bottom of the FTSE as its cautious outlook on contracts as its oil-producing clients struggle with volatile prices offset an upbeat earnings outlook.
Housebuilders Persimmon PSN.L , Taylor Wimpey TW.L , Berkeley Group BKGH.L and Barratt Development BDEV.L fell 0.9 to 1.4 percent as investors shunned stocks seen as some of the most sensitive to a hard Brexit.
Retailers Next NXT.L and Marks & Spencers MKS.L were also among top fallers, down 1.8 and 1.3 percent respectively, as disappointing news from clothes retailer Superdry SDRY.L and phone and electronics chain Dixons Carphone (LON:DC) further dented confidence in the battered retail sector. plunged 32 percent and Dixons sank 10 percent on the midcap index, while Metro Bank lost 5.7 percent after a Citi downgrade.