"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, 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 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 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 surged 8.3% after its annual report showed restructuring efforts were paying off.
Small-cap media firm Tarsus 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.
(Reporting by Muvija M and Shashwat Awasthi in Bengaluru Editing by Mark Heinrich) ((mailto:Muvija.M@thomsonreuters.com; within U.S. +1 646 223 8780, outside U.S. +91 80 6749 3638; Reuters Messaging: rm://firstname.lastname@example.org))