LONDON MARKETS: BHP, Rio Tinto Shares Higher As FTSE 100 Gains

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- U.K. stocks were on a stronger footing Tuesday, with strength coming in part from the key mining sector.

The FTSE 100 index rose 0.3% to 6,842.81. The benchmark ended Monday's session with a 0.1% gain.

Tuesday's advancers included miners Rio Tinto PLC and BHP Billiton PLC (BHP) , with shares rising 1.3% and 1.4%, respectively.

An upside "production surprise" looks to be in store at the Escondida copper mine in Chile, in which BHP has a 57.5% stake and Rio Tinto a 30% stake, said Deutsche Bank analysts in a Monday note. A strategy to run three plants at the mine may be adopted by the companies in 2015, which could increase earnings at BHP and Rio Tinto by 2% to 3% in the next couple of years, the analysts said.

Supermarket stocks, most of which fell Monday led by a decline in Tesco PLC , advanced. Tesco picked up 1.1%, J Sainsbury PLC gained 1.5% and Wm Morrison Supermarkets edged up 0.4%. Marks & Spencer Group tacked on 0.1%.

Tuesday's decliners included shares of SSE PLC . The utility company on Monday said it will sell gas transporter SSE Pipelines Ltd. to the Environmental Capital Fund for 52.7 million pounds ($87.08 million).

U.K. stocks overall held gains after data firm Markit said construction output in the U.K. increased by its fastest pace in seven months in August. The construction purchasing managers' index came in at 64.0, up from 62.4 in July, and above a 61.0 consensus estimate. The housing, commercial and civil engineering markets each logged sharp growth last month, said Markit.

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