UPDATE 2-FTSE 100 ends higher ahead of budget announcement, midcaps shunned


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    * Renishaw hits record high as founders keen to bow out
    * French Connection tumbles as suitor pulls out
    * FTSE 100 up 0.4%, FTSE 250 off 0.2%

 (Adds comment; Updates to close)
    By Devik Jain
    March 2 (Reuters) - London's FTSE 100 rose on Tuesday, led
by gains in mining and financial stocks, although the
domestically-oriented midcap index tripped on the eve of finance
minister Rishi Sunak's new budget plan. 
    After rallying as much as 1.1% in the afternoon trade, the
blue-chip index  .FTSE  closed 0.4% higher, with heavyweights
mining  .FTNMX1770 , banks  .FTNMX8350  and insurance
 .FTNMX8570  among the top boosters.
    The FTSE 250 index  .FTMC  ended 0.2% lower. However, losses
were capped by engineering firm Renishaw Plc  RSW.L , which
surged 19% to a record high after saying it is seeking a buyer
after its founders announced their plans to sell their
respective majority stakes in the company.  urn:newsml:reuters.com:*:nL3N2L01X3
    Sunak is expected to announce more borrowing on top of
almost 300 billion pounds ($418 billion) of COVID-19 spending
and tax cuts in his annual budget statement on Wednesday to
steer the economy through its third coronavirus
lockdown. urn:newsml:reuters.com:*:nL5N2KY08C urn:newsml:reuters.com:*:nL8N2KV6AE
    "Fiscal measures over the past year have acted like a bridge
from one side of the COVID-19 crisis to the other. But bridges
do not work if they only take you three quarters of the way
across the ravine," said Karen Ward, chief market strategist
EMEA at J.P. Morgan Asset Management
    "I believe the Chancellor should err on the side of an
extension that is too long, rather than one that is too short."
    Global stimulus measures and optimism about an economic
rebound from vaccination rollouts has helped the FTSE 100
recover more than 35% from a coronavirus-driven crash last year,
but the possibility of rising inflation and higher bond yields
has rattled sentiment.
    Among other stocks, Travis Perkins  TPK.L , Britain's
biggest seller of building materials, fell 3.3%, after it
restarted the process of demerging its Wickes home improvement
business.  urn:newsml:reuters.com:*:nL5N2L01QJ
    French Connection Group Plc  FCCN.L  tumbled 8.2% after
saying it was seeking new offers after a suitor backed out of
preliminary talks to buy the struggling fashion retailer.

 (Reporting by Shivani Kumaresan and Devik Jain in Bengaluru;
Editing by Subhranshu Sahu, Maju Samuel and Barbara Lewis)
 ((Shivani.Kumaresan@thomsonreuters.com; +1 646 223 8780;))
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 Gilt futures:        0#FLG:          Smallcap index:     .FTSC  
 FTSE 250 index:      .FTMC           FTSE 350 index:     .FTLC  
 Market digest:       .AD.L           Top 10 by vol:      .AV.L  
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