Following the Santa Rally which took part just before christmas, the FTSE 100 index rose above 6,000 for the first time since June 2008.
The rally, which took place in Europe and the US was driven by renewed confidence in the global economy. This was the spark of a promising welcome into the New Year, as trans-Atlantic shares rose sharply on Sunday.
Europe saw a positive Dax result, with Frankfurt increasing by 1% along with the CAC appearing 2.5% higher in Paris.
The Dow Jones Industrial Average reached a two-year high of 11,711.47 in New York. The Footsie eventually ended the year 9% higher than it began with a figure of 5,899.94.
Figures show that manufacturing output in the eurozone has increased by more than expected in December, which has been gladly recognised by Investors on the Continent.
Analysts are forecasting the blue chip induce to lie somewhere between 6,500 and 7,000 by the end of 2011. The prospect of mergers and acquisitions boom along with strong corporate earning have convinced investors to re-instate their investments into shares, despite the previous string of low return.
In the US, factory output also rose, along with an increase in spending on construction for the third month in a row.
Head of UK equities at Hargreaves Lansdown stockbrokers, Richard Hunter, said “Reports suggest that US retailers also had a very strong Christmas – things may be looking up.”