Britain's FTSE trades near record highs, miners help

* Blue-chip FTSE 100 index rises 0.2 percent

* Basic resources stocks feature among top gainers

* British index lags European peers this year

By Atul Prakash

LONDON, April 17 (Reuters) - Britain's top share index edged towards record highs on Friday, with a rise in industrial metals prices encouraging investors to buy basic-resources stocks.

The UK mining index rose 0.4 percent, the top sectoral gainer, helped by a rise of 0.9 percent and 0.6 percent respectively in shares of global players BHP Billiton (NYSE: BBL - news) and Rio Tinto (Xetra: 855018 - news) .

"The sector is reacting to a rise in key metals prices. There is some optimism with miners as the China story of a possible stimulus to boost the economy stays in the background," IG (LSE: IGG.L - news) analyst Chris Beauchamp said.

Prices of copper, aluminium and zinc rose 0.4 to 1.2 percent on the London Metal Exchange.

Energy stocks also advanced, with the UK Oil and Gas index gaining 0.2 percent.

The index is up for a seventh day in a row on recent gains in crude prices, which have surged more than 16 percent since the beginning of the month, triggered by Middle East conflict and a dip in U.S. oil production.

The blue-chip FTSE 100 index was up 0.2 percent at 7,074.17 points by 0810 GMT after climbing to a record high of 7,119.35 in the previous session. The index is up more than 7 percent so far this year.

"The market is starting to look a bit toppy. But if the FTSE 100 closes above the 7,100-point barrier again, we could see some more upside potential," IG's Beauchamp said.

The FTSE 100 lags other major European stocks indexes including Germany's DAX and France's CAC - up more than 20 percent so far this year - with political uncertainty before Britain's national election on May 7 a factor.

Opinion polls put the governing Conservatives neck-and-neck with the opposition Labour party, and the Scottish National Party may emerge as the third-biggest, raising prospects of a hung parliament.

The Conservatives have also promised a referendum on Britain's membership of the European Union by the end of 2017.

Mid-cap oilfield services company Hunting (LSE: HTG.L - news) rose 6 percent to 637 pence after Goldman Sachs (NYSE: GS-PB - news) raised its target price for the stock to 709 pence from 622 pence. (Reporting by Atul Prakash)