Britain's FTSE posts best yearly gain since 2009

* FTSE 100 up 0.3 percent on Tuesday

* Index up more than 14 percent in 2013

* Alpari targets 7,000 by end-March

By Alistair Smout

LONDON, Dec 31 (Reuters) – Britain’s top share index closed out its best year since 2009 on Tuesday, inching higher in a shortened session before the New Year break.

The FTSE 100 ended up 17.82 points or 0.3 percent at 6,749.09 points, taking its gains for 2013 to 14.4 percent.

The index hit its highest level since the end of 1999 in May, remaining 2.6 percent off those highs at the end of a year in which central bank stimulus programmes have encouraged a move out of bonds and into higher-yielding stocks.

The U.S. Federal Reserve is set to scale back its massive monetary easing programme in January.

But investors are focusing on the central bank’s commitment to keep interest rates low for longer as well as the U.S. economic recovery, suggesting the market may well extend its run-up.

“It seems like the recent uptrend is going to continue in 2014. We’ve experienced a very strong rally in equity this year, but we haven’t reached the record high levels on the FTSE, so there is definitely potential for further gains,” Myrto Sokou, senior research analyst at Sucden Financial Research, said.

Only 16 stocks ended the year in negative territory, the majority from the mining sector, which fell 16.3 percent.

With gold set for its worst year since 1981, precious metal miner Fresnillo (Other OTC: FNLPF – news) was the year’s biggest faller, down around 60 percent.

Top (Taiwan OTC: 8419.TWO – news) gainers were more exposed to the improving domestic economy, led by airlines, with International Consolidated Airlines Group up around 116 percent and easyJet , which made its FTSE 100 debut this year, up 98 percent.

Alpari analyst Craig Erlam said that from a technical standpoint, things 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 reckoned this year’s high, at 6,875, will prove to be a significant resistance, he saw 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.