Britain's FTSE sets record high surpassing 1999 peak

* Blue-chip FTSE 100 index sets record high

* The benchmark index closes 0.5 pct higher

* BHP Billiton (NYSE: BBL - news) rises after H1 results beat forecasts

By Atul Prakash

LONDON, Feb 24 (Reuters) - Britain's top equity index climbed to a record high on Tuesday as a rally in mining companies helped the three-decade-old blue-chip index to surpass its previous high, set in late 1999.

The benchmark FTSE 100 reached 6,958.89 points, surpassing its previous high of 6,950.60 set on Dec (Shanghai: 600875.SS - news) 30, 1999. The index closed 0.5 percent higher at 6,949.63 points on Tuesday.

"Finally the FTSE 100 surpassed the massive resistance level of 6,950.60. It will provide a psychological boost to the market and propel the index to trade beyond the 7,000 mark," said Jawaid Afsar, a trader at Securequity. "These lofty levels will entice a lot of investors to book profits, but the overall sentiment seems very bullish."

The FTSE 100 index has gained about 13 percent since a December low and is up nearly 6 percent this year. The market capitalisation of the FTSE 100 constituents is now about 1.9 trillion pounds ($2.94 trillion), compared with 164 billion pounds in December 1985, the first available data.

Financials have a 22 percent weight in the FTSE 100 index, while consumer goods, oil and gas and basic materials account for about 16 percent, 15 percent and 8 percent respectively.

Basic resources stocks were the top gainers in the index, with the UK mining index rising 3.2 percent on a rally in metals prices.

Global mining company BHP Billiton, up 6.2 percent, was the top gainer, after announcing further belt-tightening to withstand tough conditions. It reported a 31 percent drop in half-year profit, which beat market forecasts.

The broader market was also helped by comments from Federal Reserve Chair Janet Yellen, who said it would be several months before the Fed expects to raise interest rates.

She (Munich: SOQ.MU - news) told a congressional committee that the Fed is preparing to consider hikes "on a meeting-by-meeting basis," in a subtle change of emphasis in how the Fed has been speaking about its plans for the first rate increase since 2006.

For a Factobox on the FTSE 100 index, please click on

(Additional reporting by Sudip Kar-Gupta; Editing by Larry King)