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Updated at 1600 GMT

By Shubham Batra and Khushi Singh

Oct 9 (Reuters) -British equities mostly rebounded on Wednesday, with the biggest boost from the real estate sector, while homebuilders extended declines from the previous session after brokerages cut Vistry's target price.

The blue-chip FTSE 100 index .FTSE climbed 0.7% to clock its best day in nearly three weeks, while the mid-cap FTSE 250 .FTMC was up 0.9%. The benchmark index notched 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 .FTNMX402020 which fell 0.4% after at least six brokerages including Barclays BARC.L and Citigroup C.N cut their target price on Vistry Group VTYV.L.

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

The gains were driven by the real estate sector .FTUB3510 which rose 0.9% while construction and materials sector .FTNMX501010 jumped 2.3%.

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

CMC Markets CMCX.L ended with a 0.5% decline, having advanced earlier in the day after the trading platform forecast a 45% rise 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 ALTM.N in a $6.7 billion all-cash deal to become the world's third-largest lithium producer. The UK-listed shares of the miner ended flat.

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

Back home, GDP data for August at the end of the week will also be on markets' radar.

Reporting by Khushi Singh and Shubham Batra in Bengaluru; Editing by Savio D'Souza and Emelia Sithole-Matarise

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