One more day to go before Christmas and still London's equity market refuses to lie down.

Another burst of rumoured and actual take-over activity, mostly in the retail sector, gave a significant boost to sentiment and helped all the FTSE indices to make good progress.

But turnover was much reduced after an initial burst. At the 6 p.m. count only 474 million shares had changed hands as dealers and investors began the countdown to Christmas.

It was not only take-overs that drove the market yesterday.

Wall Street continued its strong run on Wednesday night with the Dow Jones Industrial Average pushing up 55 points and finishing above the 9,000 level, even though the US Federal Reserve's open market committee left US interest rates on hold.

And the US stock market continued to make further rapid progress early yesterday.

Dealers were slightly surprised at the extent of the yesterday. "It looks as if the market wants to go better. I think we'll have a go at 6,000 before the year-end," said one market maker.

The strategy team at CSFB concurred. "With equity markets remaining relatively perky and liquidity levels high in both a domestic and international context, it appears that fund managers are responding to pressure to put money into the markets. The possibility of a final tilt at 6,000 looms larger and larger."

One of the few negatives putting a lid on the market came from Mr Li Ka-shing, the influential Hong Kong industrialist. He prompted a minor sell-off on the Hong Kong stock market by complaining about the political direction of the former colony.

The FTSE 100 index pushed up 65.5 to clear the 5,900 level and finish at 5,908.8 its sixth gain in the past seven sessions. The FTSE 250 raced up 34.7 to 4,798.0.