Housebuilders lead FTSE bounce on government support plans
* FTSE 100 up 0.4 pct, snaps longest losing streak since 2011 * Construction groups lead risers as UK govt says to extend scheme * Ukraine crisis keeps investors wary By Francesco Canepa LONDON, March 17 (Reuters) - Britain's top share index snapped its longest losing streak in 2-1/2 years on Monday, led higher by construction companies after the UK government said it plans to continue supporting home-building. But tensions over Ukraine kept investors wary. Western powers threatened sanctions against Russia after Crimea's Moscow-backed leaders declared a 96-percent referendum vote in favour of quitting Ukraine. Housebuilder Persimmon led gainers on the FTSE 100, gaining 6.5 percent after British chancellor George Osborne said on Sunday he plans to extend a scheme to encourage house building and develop a new town close to London. Markets had speculated the scheme was going to be gradually phased out. Other housebuilders also rose, with Barratt Developments , Taylor Wimpey and Berkeley Group up between 3 percent and 6 percent. Britain's No.1 supplier of building materials, Travis Perkins, rose 1.4 percent. "It is mainly being used outside London by first-time buyers, so I think it's going to be positive for names like Taylor Wimpey, Persimmon and Barratt," Ian Osburn, an analyst at Cantor Fitzgerald, said. "But, also, inside London the international buyer, (who) is pushing along the transactions and prices, now has confidence in government support, so I think it's going to be positive for Berkeley too." Osburn estimated that the scheme, if it continued in its current form, could boost the earnings of these companies by between 10 percent and 15 percent every year. The FTSE 100 was up 0.4 percent at 6,556.04 points, bouncing from a one-month low hit on Friday and recouping a fraction of the 2.8 percent it shed last week. The UK blue-chip index had fallen for six straight sessions, its longest losing streak since November 2011, leaving it "oversold" on its seven-day Relative Strength Index, a technical momentum indicator. Traders also said investors were somewhat relieved to see that the Crimean referendum had passed without major incidents. "First of all the referendum basically turned out as expected no surprise there," Markus Huber, a senior trader at Peregrine & Black, said. "Positive was also that the referendum in general went very orderly... although much seems to depend on the sanctions the West will impose on Russia." In a sign of relief, the cost of insuring against future swings on the FTSE, as measured by the FTSE 100 volatility index , fell around 5 percent. David White, a trader at SpreadEX, said he expected volatility to spike again at the first sign of military action or when sanctions against Russia are announced.
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