LONDON MARKETS: U.K. Stocks Take A Breather From Selling; Rio Tinto Gains

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- U.K. stocks rose Monday, finding some relief after a string of selloffs knocked the FTSE 100 benchmark to its lowest level in a year.

The benchmark index ended 0.4% higher at 6,366.24 after struggling earlier in the session. Stocks in Europe and in other markets worldwide have been beaten down recently on heightened worries about slowing global growth. The FTSE 100 on Friday marked a fourth straight session of losses and finished last week down by 2.9%.

The FTSE 100 breaking "below the trend line support from the March 2009 lows is something of an alarm," said Brenda Kelly, chief strategist at IG, in emailed comments. "The 5 1/2-year bull market now looks threatened," she said.

Market action: The materials sector led gains on Monday as mining companies advanced. Anglo American PLC jumped 4.7%, becoming the FTSE's best price performer following a ratings upgrade at Credit Suisse to outperform from neutral. Read Europe Stocks to Watch.

Shares of Rio Tinto PLC (RIO) climbed 4.2% after Barron's over the weekend said the stock could rise 20% in the next 12 months, even without a merger with Glencore PLC . Rio Tinto earlier this month confirmed it had rejected a takeover proposal from Glencore in July.

Also in the mining space, Randgold Resources was up 4.4% and BHP Billiton PLC spiked up 2.9%.

Shares of AstraZeneca PLC popped up 1.3%, after Jefferies upgraded the drug maker to buy from hold.

But chip designer ARM Holdings PLC fell 2.4%, losing ground alongside Infineon Technologies AG and STMicroelectronics NV after both were downgraded to neutral from overweight at J.P. Morgan Cazenove. Semiconductor-related stocks logged big losses on U.S. markets on Friday, after Microchip Technology Inc. (MCHP) warned the chip sector may be in store for a downturn.

Shares of Smith & Nephew PLC gave up 1.5% after the company said its living cell spray-on therapy, HP802-247, failed to pass a late-stage clinical trial.

Also Monday, the U.K. government made its first move in its planned sale of its 40% stake in Eurostar, the train operator for the Channel Tunnel. It has set an Oct. 31 deadline for "expressions of interest" from potential buyers.

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