London's FTSE 100 share index closed at 5,000 on Thursday, the first time it has ended at or above the level since 31 May 2002. On Wednesday, the index of leading UK shares had briefly risen above the 5,000 level before falling back.
Takeover activity has lifted sentiment, along with strong company results from oil companies and banks.
Lower oil prices and strong US stock markets also boosted investor confidence and pushed up UK shares.
Dotcom crash
The FTSE 100 is still a way off peaks achieved in December 1999, when, fuelled by the internet boom, it finished the year at an all-time high of 6,950.
But the rise brings the FTSE closer to the levels seen before shares prices sank following the bursting of the dotcom bubble and the September 11 attacks.
The index fell as low as in 3,287 in March 2003.
In 2004 it finished at 4,814.3, following a year in which investor sentiment was knocked by jitters over rising oil prices and interest rates.
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