FTSE buoyed by retailers as investors eye Budget

THE FTSE 100 headed up in early trading as retailers regained some momentum while investors were turning their attention to the Chancellor's budget speech.

George Osborne is expected to rejig taxes while seeking to keep his austerity plan on track.

However figures showing that that public sector net borrowing hit a record for February cast a shadow. Borrowing jumped to £15.18bn last month compared with £8.87bn in February 2011.

Markets across Europe had been pegged back yesterday by data suggesting a slowing of growth in China with commodity stocks in particular hit.

But today miners and banks stabilised while the retail sector was buoyed by results from Sainsbury's showing a rise in sales and market share.

The grocer was up 2.2 per cent while Marks & Spencer nudged up by 1.6 per cent.

Debenhams, which reported first-half results yesterday, rose more than two per cent as Citigroup raised its rating on the department store firm to "buy" on valuation grounds.

Meanwhile outsourcer Serco rose 2.5 per cent after HSBC upgraded its recommendation on the stock, saying the firm is its preferred pick among UK outsourcers that will likely see further pressure from UK government austerity.

Elsewhere, heavyweight Vodafone climbed 1.4 per cent, extending gains from the previous session, as Goldman Sachs added the mobile phone operator to its "conviction buy" list.

And Wolseley the world's biggest building supplies company, added 2.7 per cent, as Credit Suisse raised its target price on the firm ahead of US housing data due out later in the session.

It was a broadly flat start in the banking sector with Barclays and RBS nudging up marginally while Lloyds Banking Group dipped by around 0.4 per cent.

On the down side insurer Aviva was off by 3.3 per cent and also in the sector Standard Life dipped by 2.9 per cent.

Ex-dividend factors took 3.1 points off the FTSE 100, with Aviva, InterContinental Hotels, Smiths Group and Standard Life all losing their payout attractions.

In Asia the Nikkei closed down 0.5 per cent and the Hang Seng 0.1 per cent.