UPDATE 2-UK's FTSE recovers as oil majors, homebuilders surge

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* FTSE 100 up1.0%, FTSE 250 adds 1.3%

* UK business activity plunges to a record low

* Taylor Wimpey jumps on rise in orders, demand for homes

* Meggitt soars on higher defence revenue, cash-saving plans
(Updates with market closing)

By Devik Jain and Sruthi Shankar

April 23 (Reuters) - Britain's FTSE 100 rebounded from early
losses on Thursday, as surging oil prices and signs that major
UK homebuilders were planning to resume work boosted sentiment,
with investors shrugging off some shockingly weak economic data.

After falling as much as 0.6% in the morning session, the
blue-chip FTSE 100 ended 1% higher, boosted by oil
majors Royal Dutch Shell and BP as crude prices
recovered from a collapse earlier this week.

Shares in Taylor Wimpey surged 9.4% and smaller peer
Vistry, formerly known as Bovis Homes, jumped 11.5%
after signalling plans to restart construction work in the next
two weeks.

Taylor Wimpey also said it continued to sell houses online
during the lockdown and posted solid year-on-year growth in
orders, sparking a rally in shares of fellow homebuilders
Barratt Development and Persimmon.

That added to hopes of a rebound in economic activity, with
stock markets even looking past data showing a historic collapse
in demand for UK businesses in April as the coronavirus pandemic
forced a nationwide lockdown.

The IHS Markit/CIPS Flash UK Composite Purchasing Managers'
Index (PMI) fell to a record low of 12.9 from 36.0 in March -
miles below even the weakest forecast of 31.4 in a Reuters poll
of economists.

"While the absolute numbers may have been a surprise, the
sharp contraction is no surprise," said Chris Bailey, European
strategist at Raymond James. "But if you see numbers like this
in May and June, that is not in market price today."

The FTSE 100 has recovered nearly 19% since mid-March lows,
buoyed by the trillions of dollars injected by major central
banks and governments to soften the economic blow of the
pandemic.

Britain's government plans to sell 180 billion pounds ($222
billion) of bonds in the next three months, more than it had
recently pencilled for the entire fiscal year.

Several European countries including Germany and Spain have
moved to relax restrictions, but hopes of an immediate lifting
of lockdown in Britain looked bleak as the death toll rose past
18,000.

"We do expect a partial rebound in economic growth in the
third quarter assuming the harsher elements of lockdown are
eased over the next couple of months," ING's developed markets
economist James Smith said.

"But more importantly, we don't expect the UK economy to
recover to its pre-virus size until 2022 at the earliest."

Consumer giant Unilever Plc slipped 1.8%
after the company withdrew its full-year forecast and warned
that its performance could deteriorate in the current quarter as
it adjusts to a world in which people consume more at home.

Online food ordering service Just Eat Takeaway.com
fell 2.2% after it announced share and convertible bond
issue to shore up its finances as Britain's competition watchdog
gave the company's merger final approval.

Engineering company Meggitt jumped 6.7% after it
recorded a 15% rise in its quarterly defence revenue, and said
it would cut 1,800 jobs to save cash in the face of the health
crisis.

Aston Martin surged 12% after saying it plans to
restart its St Athan factory in south Wales on May 5 and resume
operations at Gaydon, after shutdowns forced the luxury car
maker to suspend production at both sites.
(Reporting by Devik Jain and Sruthi Shankar in Bengaluru;
Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila and Hugh
Lawson)