By Devik Jain

(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 last year.

The blue-chip index rose 0.7% after slumping 2.6% in the previous session. Spirits maker Diageo climbed 3.2% 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 gained 2.8% as JP Morgan raised its price target on the stock after upbeat trading update from the valve maker.

The domestically focused mid-cap FTSE 250 index advanced 0.4% after official data showed Britain’s economy shrank by 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 demonstrate the resilience of the British public. Despite the reopening of schools, the lockdown for many sectors was still very much in place and yet the economy was blossoming,” said Danni Hewson, a financial analyst at AJ Bell.

“There is still a lot of ground to be made up, but these figures suggest a quick recovery is within reach.”

Globally, Asian stocks extended a sell-off from the previous session as investors braced for U.S. consumer price index report with market-based measures of inflation expectations having moved higher. [MKTS/GLOB]

UDG Healthcare jumped 21.6% 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 slipped 3.4% to the bottom of the FTSE 100 index after rival food delivery firm Delivery Hero announced a launch of operations in Berlin.

(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu)