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%

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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. 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. "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. 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.