British equities rebound after worst session in two months

The benchmark index hit its biggest single-day percentage drop in two months on Tuesday

British equities mostly rebounded on Wednesday, with the biggest boost from the real estate sector, while homebuilders extended declines from the earlier session after brokerages cut Vistry's target price.

The blue-chip FTSE 100 index jumped 0.7% to reach its best day in around three weeks, while the mid-cap FTSE 250 was 0.9% higher. The benchmark index hit its biggest single-day percentage drop in two months on Tuesday.

All FTSE 350 sectors traded in the green, except household goods and home construction which dropped 0.4% after at least six brokerages including Barclays and Citigroup cut their target price on Vistry Group.

The homebuilder's shares plummeted by 24% in the previous session after a profit warning.

The gains were driven by the real estate sector which gained 0.9% while construction and materials sector climbed 2.3%.

Among individual stocks, Mondi added 4% after the paper and packaging company agreed to buy Schumacher Packaging's German, Benelux and UK packaging assets for €634 million ($696 million), including debt, to expand in Western Europe.

CMC Markets closed with a 0.5% drop, having gained earlier in the day after the trading platform forecast a 45% increase in first-half net operating income, buoyed by cost cuts and sustained levels of trading activity.

In other news, Rio Tinto said it would buy Arcadium Lithium in a $6.7 billion all-cash deal to become the world's third-biggest lithium producer. The UK-listed shares of the miner closed flat.

Investors will now shift their focus to the minutes of the U.S. Fed's last monetary policy meeting to gauge the size and extent of further interest-rate cuts in the country.