* FTSE 100 up 0.3 percent

* Index up around 14 percent in 2013

* Alpari targets 7,000 by end-March

By Tricia Wright

LONDON, Dec 31 (Reuters) – Britain’s top shares inched higher on Tuesday in a shortened session of trade before the New Year’s break, with the index on course to record its best year since 2009.

The FTSE 100 was up 17.57 points at 6,748.84 points by 0832 GMT, recouping a 0.3 percent drop seen in the previous session which had followed six sessions of gains – the index’s longest winning streak since October.

The London bourse will close at 1230 GMT on Tuesday.

The UK benchmark has gained around 14 percent in 2013, at one point scaling 13-year highs some 2 percent above current levels, bolstered by central bank stimulus and a move out of safe bonds and into higher-yielding assets, such as stocks.

The U.S. Federal Reserve is set to scale back its massive monetary easing programme in January, but investors are focusing on the underlying U.S. economic recovery and the central bank’s commitment to keep interest rates low for longer.

While the market gains have lifted valuations above long-term averages, investors remain bullish on equities. The FTSE 100 trades on a 12-month forward price/earnings ratio of 12.9 times, against its 10-year average of 11.9 times, according to Thomson Reuters Datastream.

“The market continues to be addicted to cheap money and low interest rates and as that will still be plenty available in 2014 it again could be a good year for the markets,” said Lex van Dam, hedge fund manager at Hampstead Capital.

Alpari analyst Craig Erlam reckoned that from a technical standpoint, charts are still looking very positive for the FTSE 100, which is trading above the three major simple moving averages – 20, 50, and 200-day.

Although he reckons this year’s high, at 6,875, will prove to be a significant resistance, he sees this as a temporary impediment.

“I think we’ll see new record highs being made in the FTSE this quarter, with the index hovering around 7,000 at the end of March,” Erlam said.