Britain's FTSE index edges lower as miners slip

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

* FTSE 100 index down 0.1 percent

* Hits one-month high before easing

* Alliance Trust gains on M&A news

By Atul Prakash

LONDON, May 31 (Reuters) - Britain's top share index edged lower from an earlier one-month high on Tuesday, with mining companies losing ground after metals prices came under pressure from a rise in the dollar.

The UK mining index fell 0.8 percent as copper prices declined on a resurgent dollar following increasing expectations of a U.S (Other OTC: UBGXF - news) . interest rate hike.

Copper prices remained on track for a more than 7 percent decline in May, the biggest monthly drop since November.

St. Louis Federal Reserve President James Bullard on Monday echoed remarks on Friday from U.S. central bank chief Janet Yellen that global markets appear to be "well-prepared" for a summer interest rate hike by the Fed, although he did not specify a date for the move. A stronger dollar makes commodities more expensive for holders of other currencies.

Shares (Berlin: DI6.BE - news) in BHP Billiton (NYSE: BBL - news) , Antofagasta (Other OTC: ANFGF - news) and Rio Tinto fell 0.8 to 1.7 percent, dragging the blue-chip FTSE 100 index 0.1 percent lower to 6,266.54 points by 0831 GMT.

However, the commodity-heavy index touched a one-month high of 6,290.07 points earlier in the session. It (Other OTC: ITGL - news) has remained in positive territory this month and was headed for its fourth straight month of gains.

"The FTSE 100 is still in the midst of sideways consolidation, but with a welcome test of last week's 6,280 ceiling and a close venture to 6,300," said Augustin Eden, analyst at Accendo Markets, adding that a drop towards 6,240 would send a bearish signal for the index.

Among mid-caps, Alliance Trust rose 3.6 percent, the top FTSE mid-250 gainer, after RIT Capital Partners (LSE: 0QOQ.L - news) made an informal merger proposal for the investment firm. RIT confirmed talks saying a merger possibility was at "a very preliminary stage of consideration".

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

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Mike Dolan, Markets Editor EMEA. (Reporting by Atul Prakash; Editing by Raissa Kasolowsky)