FTSE ends 3 percent higher as 'Remain' camp in Britain's EU referendum regains ground

By Kit Rees and Atul Prakash

LONDON (Reuters) - Britain's top share index ended sharply higher on Monday, with banking and house building stocks surging following latest polls suggesting the campaign for Britain to remain in the European Union was regaining a narrow edge over the "Out" camp.

The blue chip FTSE 100 index (.FTSE) finished 3 percent higher, the biggest one-day percentage gain since mid-February, at 6,204.00 points, after earlier rising to 6,236.53, the highest level since June 9.

The market reacted positively to two weekend opinion polls showing the campaign to keep Britain in the EU bloc ahead of its June 23 referendum on membership had regained its lead, while a third poll also showed momentum for an "In" vote.

"Waves from the Brexit vote are buffeting the UK stock market, tossing it up and down as the opinion polls shift this way and that," Laith Khalaf, senior analyst at Hargreaves Lansdown, said.

"Until the vote is over, we can expect more price swings, as markets struggle to price in a unique event that carries with it such a high degree of uncertainty."

Shares in domestically-focused companies, seen as sensitive to the outcome of the referendum, rallied, with banks Royal Bank of Scotland (RBS.L), Lloyds (LLOY.L) and Barclays (BARC.L) all jumping between 6.7 to 7.6 percent.

Housebuilders Taylor Wimpey (TW.L), Barratt Developments (BDEV.L), Berkeley Group (BKGH.L) and Persimmon (PSN.L) gained between 5.9 percent to 6.8 percent.

"The risk-off mood of last week which was fading on Friday has turned decisively this morning and ... this (could) extend into the rest of the week provided that the polls continue to point towards 'Remain'," Chris Beauchamp, senior market analyst at IG, said.

However, precious metals miners Rangold Resources (RRS.L) and Fresnillo (FRES.L) underperformed the broader market, down 1.4 percent and 0.2 percent respectively as investors dumped perceived safe-haven assets and the price of gold fell.

Among the mid-caps, however, Circassia Pharmaceuticals (CIRCI.L) plunged 66 percent after a cat allergy treatment failed in a late-stage trial due to a marked placebo effect.

(Reporting by Kit Rees; Editing by Richard Balmforth)