Britain's FTSE rises, though Barclays, RBS fall after stress test

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* FTSE 100 up 0.2 pct

* Barclays (LSE: BARC.L - news) , RBS (LSE: RBS.L - news) fall after stress test

* Anglo American (LSE: AAL.L - news) leads miners higher

* AB Foods also rises

By Kit Rees

LONDON, Aug 1 (Reuters) - UK shares rose on Monday, led higher by a rise in mining stocks, though British banks Barclays (Swiss: BARC.SW - news) and Royal Bank of Scotland fell following the results of the European Union's stress test.

The UK's FTSE 100 index was up 0.2 percent at 6734.29 points by 0909 GMT, having posted its second monthly gain in a row in July.

The British banking sector retreated 0.6 percent as shares in Barclays and Royal Bank of Scotland fell 2.6 percent and 2.2 percent respectively.

The European Banking Authority (EBA) published the results of its annual stress test on Friday evening which checked the health of 51 lenders from across the European Union.

Barclays was among the worst-performing banks in the stress test, while Royal Bank of Scotland was also among the top 15 weakest banks.

"The banks are in a much better position than they were, but I think there is a lot of concern around the banks in relation to how heavily linked they are to the UK economy and how interest rate cuts ... (will) play through into their profitability," Laith Khalaf, senior analyst at Hargreaves Lansdowne, said.

Among the top gainers, Anglo American rose more than 4 percent after RBC (Other OTC: RBCI - news) raised its rating on the stock to "outperform" from "sector perform".

UBS (LSE: 0QNR.L - news) also upgraded Anglo American's earnings outlook following its better-than-expected results it reported last week.

A rally in the price of copper, which hit a one-week high on positive data from China, also supported the sector.

Mining stocks BHP Billiton (NYSE: BBL - news) , Antofagasta (Other OTC: ANFGF - news) and Rio Tinto (LSE: RIO.L - news) rose between 2.2 percent to 3.5 percent.

Primark owner Associated British Foods (LSE: ABF.L - news) rose 2.3 percent after Deutsche Bank (LSE: 0H7D.L - news) raised its rating on the stock to "buy" from "hold", citing a positive near term outlook.

"Improving sugar prices, recent currency moves and balance sheet flexibility are all in (Associated British Foods') favour. Primark, the driver of most of ABF's growth in the past decade, continues to power ahead for the long term", analysts at Deutsche Bank said in a note.

Among the top fallers, supermarket Morrison fell 2 percent after announcing a round of price cuts.

Peers Tesco and Sainsbury (Amsterdam: SJ6.AS - news) were also down 1.1 percent and 1 percent respectively.

Education publisher Pearson (Xetra: 858266 - news) extended its losses from the previous session, down 2 percent after Deustche Bank cut its target price on the stock.

Pearson plunged more than 9 percent on Friday after reporting a miss in its first half sales. (Reporting by Kit Rees)