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* Blue-chip FTSE 100 index closes 3 pct higher
* Banks, housebuilders among top gainers
* Circassia Pharmaceuticals slimps on failed drug
By Kit Rees and Atul Prakash
LONDON, June 20 (Reuters) - Britain's top share index endedsharply higher on Monday, with banking and housebuilding stockssurging following latest polls suggesting the campaign forBritain to remain in the European Union was regaining a narrowedge over the "Out" camp.
The blue chip FTSE 100 index finished 3 percenthigher, the biggest one-day percentage gain since mid-February, at 6,204.00 points, after earlier rising to 6,236.53, thehighest level since June 9.
The market reacted positively to two weekend opinion pollsshowing the campaign to keep Britain in the EU bloc ahead of itsJune 23 referendum on membership had regained its lead, while athird poll also showed momentum for an "In" vote.
"Waves from the Brexit vote are buffeting the UK stockmarket, tossing it up and down as the opinion polls shift thisway and that," Laith Khalaf, senior analyst at HargreavesLansdown, said.
"Until the vote is over, we can expect more price swings, asmarkets struggle to price in a unique event that carries with itsuch a high degree of uncertainty."
Shares in domestically-focused companies, seen as sensitiveto the outcome of the referendum, rallied, with banks Royal Bankof Scotland, Lloyds and Barclays alljumping between 6.7 to 7.6 percent.
Housebuilders Taylor Wimpey, Barratt Developments, Berkeley Group and Persimmon gainedbetween 5.9 percent to 6.8 percent.
"The risk-off mood of last week which was fading on Fridayhas turned decisively this morning and ... this (could) extendinto the rest of the week provided that the polls continue topoint towards 'Remain'," Chris Beauchamp, senior market analystat IG, said.
However, precious metals miners Rangold Resources and Fresnillo underperformed the broader market, down1.4 percent and 0.2 percent respectively as investors dumpedperceived safe-haven assets and the price of gold fell.
Among the mid-caps, however, Circassia Pharmaceuticals plunged 66 percent after a cat allergy treatmentfailed in a late-stage trial due to a marked placebo effect. (Reporting by Kit Rees; Editing by Richard Balmforth)
