* FTSE 100 up 0.8 pct, bounces off technical support
* Index set to test Feb high -ING
By Francesco Canepa
LONDON, April 9 (Reuters) - Britain's top share index stageda technical bounce on Wednesday, helped by a rally inhousebuilders as analysts flagged buying opportunities in sharesthat have underperformed recently.
The FTSE 100 shed 1.6 percent over the previous twodays but charts showed the trend for the index remained up andinvestors were still prepared to buy into market dips, betting arecovery in the global economy would support shares.
The FTSE was up 50.85 points, or 0.8 percent, at 6,641.54points by 1040 GMT, bouncing from technical supportcorresponding to its 200-day moving average and the 61.8 percentretracement of its February rise.
It was now testing its 50-day moving average at 6,653points, a break above which could pave the way for a risetowards the index's February peak at around 6,860 points.
"We're still seeing a series of higher lows, which issomewhat promising," said Roelof-Jan Van den Akker, seniortechnical analyst at ING.
"We're now trying to break through the 50-day moving averageline ... and I expect this will happen in the next few days,followed by a break above the recent peak at 6,706 for anotherrally towards strong overhead horizontal resistance at 6,840."
Among specific sectors, housebuilders were buoyed by abullish note on the sector from Deutsche Bank, traders said,with the investment bank saying their sensitivity to interestrates has been overestimated.
Barratt Developments (LSE: BDEV.L - news) led blue chips higher with a2.8 percent rise, while among midcaps Taylor Wimpey (LSE: TW.L - news) added2.6 percent and Bovis Homes (LSE: BVS.L - news) climbed 0.5 percent, asDeutsche Bank named the trio its top picks.
The Thomson Reuters UK Homebuilding index had fallen 13 percent from its February peak, compared with a 4percent fall for the FTSE.
The sector index had doubled in value during the past threeyears, underpinned by tight supply and British initiatives tospur the job-intensive sector, such as the 'Help-to-Buy'mortgage scheme.
Technology stocks were also back in demand on Wednesday,with ARM Holdings (LSE: ARM.L - news) up 2.4 percent and Peppa Pig ownerEntertainment One (LSE: ETO.L - news) up by 5.6 percent, making it thesecond-biggest mid-cap gainer.
They mirrored advances in the tech-heavy U.S. Nasdaq, which recovered some of its poise after worries aboutover-valuation triggered the index's steepest three-day dropsince November 2011.
Fresh tensions over Ukraine may cap any gains for now,however, after the United States accused Russian agents onTuesday of stirring separatist unrest in eastern Ukraine.
"... It feels like we have found a bottom for now, althoughevents in Ukraine might keep investors wary of dipping theirtoes back in," Sanlam Securities head of trading Mark Ward said.
Some analysts reckoned on a period of consolidation for theFTSE 100, at least until the new reporting season gets fullyunderway. Aluminium group Alcoa (NYSE: AA - news) kicked off proceedings inthe United States last night, reporting earnings ahead ofexpectations even though revenues missed forecasts.
"We've been waiting for some kind of catalyst to drive themarket forward again, and hopefully it's something that we mightsee from the Q1 reporting season." (Additional reporting by Tricia Wright; Editing by CatherineEvans)
- Market Movers
- Stocks & Offerings
- Deutsche Bank
- FTSE 100