UPDATE 2-FTSE 100 closes higher on strong earnings, upbeat GDP data

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* Diageo tops FTSE 100 on restarting capital return plan
* UK economy gears up for recovery, grows 2.1% in March
* PE firm to buy UDG Healthcare in $3.7 bln deal, shares
jump
* FTSE 100 up 0.8%, FTSE 250 down 0.3%

(Updates with market close)
By Shivani Kumaresan and Devik Jain
May 12 (Reuters) - London's FTSE 100 rebounded on Wednesday,
supported by positive earnings updates from companies including
Diageo, while stronger than expected monthly GDP data bolstered
optimism about a sharp recovery from the pandemic-driven slump.
The blue-chip index .FTSE rose 0.8% after slumping 2.6% in
the previous session. Spirits maker Diageo DGE.L climbed 3.4%
after it forecast organic operating profit growth of at least
14% in its current fiscal year and restarted its capital return
programme. Spirax-Sarco Engineering SPX.L gained 1.9% as JP Morgan
raised its price target on the stock after an upbeat trading
update from the valve maker. Official data showed Britain's economy shrank by a less than
feared 1.5% in the first quarter, when the country was under a
third lockdown. In March, the economy grew by 2.1% from February
led by the retail sector. "Today's GDP figures for March are heavily driven by the
reopening of schools, given child numbers feed directly into the
calculations of education output," said James Smith, developed
markets economist at ING.
"With a further reopening step now formally approved for
Monday, we think GDP growth could come in just shy of 5% in the
second quarter."
The FTSE 100 has gained about 8.4% year-to-date on optimism
that speedy COVID-19 vaccinations and constant policy support
from the government would drive a stronger economic recovery.
The domestically focused mid-cap FTSE 250 index .FTMC fell
0.3%.
Globally, stronger-than-expected inflation data lifted U.S.
Treasury yields, underscoring concerns among some investors that
the Federal Reserve could be wrong in its prediction that
inflation pressures in the United States are "transitory".
MKTS/GLOB
UDG Healthcare UDG.L jumped 20.7% after private equity
firm Clayton, Dubilier & Rice (CDR) agreed to buy the
pharmaceuticals services company for 2.6 billion pounds ($3.7
billion). However, London-listed shares of Just Eat Takeaway.com NV
JETJ.L slipped 8.3% to the bottom of the FTSE 100 index after
rival food delivery firm Delivery Hero DHER.DE announced a
launch of operations in Berlin.