UPDATE 2-British mid-caps jump over signs of economic growth; Babcock surges

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* Babcock surges on restructuring plans, JPMorgan upgrade
* UK economy grew 0.4% in February
* Deliveroo gains on expanding delivery trial to 100 stores
* FTSE 100 flat, FTSE 250 adds 0.5%

(Updates to close)
By Devik Jain and Shashank Nayar
April 13 (Reuters) - British mid-caps ended higher on
Tuesday and hovered near record levels as data showed the
country's economy grew in February and Babcock International
surged on its proposed restructuring plans.
Shares of the British engineer BAB.L surged 32% to the top
of FTSE 250 index after the company unveiled a plan that
included divesting certain businesses. JP Morgan upgraded the
stock to "overweight".
The domestically focussed mid-cap index .FTMC ended 0.5%
higher as Britain's economy grew by smaller-than-expected 0.4%
in February from January. "Major factors that were affecting UK markets seems to have
taken the backfoot now and investors seem to be pretty bullish
especially on British midcaps on the valuations and medium term
growth perspective," said James Gutman, chief of investment
portfolios, Dolfin Financial.
The blue-chip index .FTSE was subdued, with Just Eat
Takeaway JETJ.L being the top gainer as its orders jumped by
79% in the first quarter, but weakness in financial and energy
stocks weighed on the index. The FTSE 100 has risen 6.5% so far this year as huge vaccine
rollouts and government stimulus helped boost optimism about a
faster economic rebound. But a recent surge in COVID-19 cases
globally and elevated yield levels have kept gains limited.
"After strong gains over the last 12 months, in anticipation
of economic recovery, the FTSE 100 has lost ground over recent
days, perhaps starting a phase of consolidation," said Paul
Jackson, global head of asset allocation research at Invesco.
Among other stocks, Deliveroo Holdings ROO.L gained 5.7%
after the food delivery group and supermarket Sainsbury 's
SBRY.L expanded a grocery delivery trial to around 100 stores
across Britain under a new two-year contract. Sportswear retailer JD Sports JD.L rose 3% after it
forecast higher profit in 2022 and reported a rise in annual
profit as some stores reopened this week and online sales
continued to surge.