The British stock market will look this week to extend gains during the first week of 2006, with many investors returning from their Christmas and New Year holidays.
After a shortened session on Friday, the FTSE 100 index of leading shares closed at 5,618.80 points, an increase of 0.42 percent or 23.4 points from the previous week.
Investors were hoping for another bullish year after a strong rally in 2005 saw the FTSE 100 index of leading shares rise over 16.5 percent.
The London Stock Exchange reopens for trade on Tuesday, January 3, for a four-day week after the long bank holiday weekend.
Richard Hunter, head of equities at Hargreaves Lansdown, forecast 2006 to be "prosperous" for investors, and predicted that the FTSE 100 would hit 6,000 points.
The FTSE 100 had ended Thursday at 5,638.30 points - the highest close since July 2001 - after striking a four-and-a-half year intra-day high of 5647.20.
"The potential easing of (British) interest rates, continuing merger and acquisition activity and strong corporate earnings would all provide good reason for investors to get involved in 2006," Hunter added. No British companies were scheduled to release results data this week.
Increased take-over activity, which saw shares in British telecoms group O2, ports and ferries operator P and O, and drinks giant Allied Domecq make serious gains in 2005, was tipped to continue next year.
Graham Secker, UK equity strategist at Morgan Stanley, added: "We expect merger and acquisition activity to remain a key presence in equity markets next year."
And a further cut in interest rates - thought by many economists to be coming as soon as February - could provide more encouragement for the London markets.
Bank of England policymakers decided to keep the cost of borrowing in Britain at 4.50 percent in December for the fourth month in a row, after a cut from 4.75 percent in August.