* FTSE 100 up 0.7 percent
* Miners strong on copper, Randgold results
* ARM gains as Numis bullish
By Simon Falush
LONDON, Feb 7 (Reuters) - Commodity stocks drove gains in Britain's top share index by midsession on Monday, with miners bolstered by record copper prices and as Randgold Resources posted strong results and raised its dividend.
By 1200 GMT the FTSE 100 was 42.86 points, or 0.7 percent, firmer at 6,040.24, its highest since Jan. 19 having ended up 0.2 percent on Friday at 5,997.38.
Randgold Resources said full-year profit jumped 43 percent as higher gold prices outweighed a decline in production, and it planned to raise its dividend 18 percent.
Upbeat broker comment helped Xstrata, 2.6 percent ahead, as Citigroup hiked its target price and repeated its "buy" rating, citing superior growth, ability to do further accretive M&A deals, and cost reduction potential.
Xstrata was also aided by bullish comment from Nomura, which named it, alongside Anglo American, as a top pick.
Miners were also lifted as copper hit a record high, underpinned by a weaker dollar and a positive fundamental outlook.
"It all feels very bullish, investors seem to have appetite for risk and its hard to see what is going to dent it," said David Jones, chief market strategist at IG Index. "The market seems to be expecting economic recovery, so there is going to have to be a real shock to knock it off course."
Energy stocks were also in favour, recovering after recent falls, with BP climbing 1.4 percent.
ARM GAINS
ARM Holdings was the top blue-chip gainer, boosted as Numis raised the chip designer's price target to 660 pence on promising long-term revenue drivers.
Can maker Rexam firmed 2.7 percent. The company has appointed Barclays Capital to sell its beverage and specialties arm in a deal that could be worth 200 million pounds ($322 million), the Mail on Sunday reported.
Angus Campbell, head of sales at Capital Spreads, said overall investors were treading with caution ahead of Thursday's Bank of England interest rate decision.
"Expectations for interest rate hikes are increasing, so that is certainly something that is at the forefront of investors' minds."
"I think we are seeing this morning, with copper hitting a new high, that there is concern over inflation, and at some point, if it is not this week it will be very soon, that the Bank will raise rates," he said.
The market was also keeping a close eye on developments in Egypt. President Hosni Mubarak's government was to hold its first full meeting of a new cabinet on Monday since protests erupted against his rule and there was no sign yet of progress in talks with an opposition which wants him out.
With the FTSE 100 having gained in four of the past five days, technical analysts said the index was not far short of some substantial resistance levels.
January's high at around 6,090 and the 2006 high of 6,137 were both being watched, said Nicole Eilliott, technical analyst at Mizuho Corporate Bank. (Additional reporting by Tricia Wright; Editing by Dan Lalor)