Miners, StanChart help FTSE to set new record high

* Blue-chip FTSE 100 index ends 0.2 pct higher

* Index hovers above 7,000 points after hitting highs

* StanChart (HKSE: 2888-OL.HK - news) extends last week's rally, miners up

By Atul Prakash

LONDON, March 23 (Reuters) - Britain's blue-chip share index set a record high on Monday as mining stocks rallied with firmer metals prices, outpacing weakness in shares such as Weir Group.

The UK mining index gained 2.2 percent as copper hit a two-month high, driven by a weaker dollar on expectations the U.S. Federal Reserve will stay accommodative over the near term. Global miner BHP Billiton (NYSE: BBL - news) rose 2.6 percent, while Glencore (Xetra: A1JAGV - news) was up 2.4 percent.

Asia-focused Standard Chartered (HKSE: 2888.HK - news) was the top FTSE 100 performer and its 6.5 percent rise on Monday took gains to more than 20 percent since mid-March on the back of a weaker dollar and positive broker comments, with Citi and JP Morgan (Other OTC: MGHL - news) becoming the latest to upgrade the bank.

"In a sense both the move higher in Standard Chartered and the commodity complex were triggered by the loss of strength in the U.S. dollar," Jasper Lawler, analyst at CMC Markets, said.

"Emerging markets stand to fare a lot better with a weaker dollar, helping StanChart who specialise in the region, whereas commodity prices tend to rise as the dollar falls, which helps mining and oil companies."

However, engineering company Weir Group fell 2.2 percent to 1,801 pence after RBC downgraded it to "sector perform" from "top pick", and cut its price target to 1,850 pence from 2,150 pence.

The benchmark FTSE index ended 0.2 percent higher at 7,037.67 points, a new life-time peak. The index rose for a sixth straight session on Monday and has gained nearly 7 percent so far this year.

The market has been spurred by official comments that have led investors to push back the timing of their expectations for U.S. and UK rate rises.

However, investors traded cautiously, seeing several equity indexes in Europe near their multi-year peaks as vulnerable to profit-taking.

"We are nervous of buying into a rally that is less about improved corporate earnings forecasts, and more about delving into the tea leaves of statements from the U.S. Fed," deVere Group international investment strategist, Tom Elliott, said.

Highlighting earnings risks, Deutsche cut cruise-operator Carnival (LSE: CCL.L - news) to "hold" from "buy" ahead of results due on March 27, saying currency volatility could affect earnings. Its shares fell 1.6 percent.

"We remain positive on (Carnival) as we think the medium term earnings recovery potential remains intact. However, with only 5 percent upside to our 34 pound price target we move our recommendation to hold," Deutsche Bank (LSE: 0H7D.L - news) analysts said in a note. (Additional reporting by Alistair Smout; Editing by Louise Ireland (Other OTC: IRLD - news) and Ruth Pitchford)