ARM and Kingfisher help Britain's FTSE to bounce back

* FTSE 100 up 0.6 percent after falling in 4 sessions

* ARM rises after U.S. led tech fall last week

* Kingfisher (LSE: KGF.L - news) gains after Mr Bricolage deal collapse

* CRH (NYSE: CRH - news) drops on Holcim (LSE: 0QKY.L - news) -Lafarge (Paris: FR0000120537 - news) merger uncertainty

By Atul Prakash and Alistair Smout

LONDON, March 30 (Reuters) - Britain's top share index rose on Monday, recovering ground in a broad-based rally after a steep weekly drop, supported by a rise in chip-designer ARM after gains for the tech sector on Wall Street and a stronger Kingfisher.

Kingfisher rose 3.2 percent after Europe's largest home improvement retailer said its proposed 275 million euro ($298 million) purchase of smaller French rival Mr Bricolage had collapsed.

Shares (Berlin: DI6.BE - news) in ARM rose nearly 2 percent, recovering after dropping 10 percent in two days last week. It gained following a rebound in semiconductor stocks in late U.S. trade on Friday after a report that Intel Corp was in talks to buy rival Altera Corp (NasdaqGS: ALTR - news) .

"The sector is still fairly solid. It obviously had a pull-back over the last week or so ... but the trend remains fairly bullish across the board," said Manoj Ladwa, head of trading at TJM Partners.

Miners also advanced, tracking a gain in key industrial metals prices. The British mining index rose 0.5 percent, helped by a 0.6 to 1.5 percent rise on Rio Tinto (Xetra: 855018 - news) , Antofagasta (Other OTC: ANFGF - news) and Anglo American (LSE: AAL.L - news) .

The blue-chip FTSE 100 index also recovered from a weekly fall, up 0.6 percent at 6,891.15 points by 1104 GMT, after dropping 2.4 percent last week. It climbed back towards a record high on Tuesday at 7,065.08, although the index remained about 2 percent away from that level.

Despite its return to all-time highs, the British blue-chip index has underperformed euro zone shares since the euro zone crisis peaked in the summer of 2012.

A general election in May, the outcome of which remains deeply uncertain, has many investors betting that this underperformance could continue.

"On the positive side UK relative valuations have improved substantially following the 30 percent underperformance versus euro zone. However, the May elections could be quite messy; we prefer to stay (underweight) into that event risk," equity strategists at JP Morgan said in a note.

In other merger and acquisition news, CRH fell 1.2 percent on concerns that investors in Holcim were unhappy with the revised deal to merge with Lafarge.

Irish cement maker CRH has agreed to buy assets from Holcim-Lafarge that could transform its business. However, the deal is contingent on the merger being completed. (Additional reporting by Alistair Smout; Editing by Crispian Balmer)