* FTSE 100 up 0.4 pct, snaps longest losing streak since


* Construction groups lead risers as UK govt says to extend


* 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 (LSE: BDEV.L – news)

, Taylor Wimpey (LSE: TW.L – news) and Berkeley Group up

between 3 percent and 6 percent. Britain’s No.1 supplier of

building materials, Travis Perkins (LSE: TPK.L – news) , 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 (Frankfurt: OHP.F – news) 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 (Other OTC: FSTC – news) 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.