The UK’s leading index closed at 6,865.86, up 28 points or 0.4% on the day and within striking distance of the all-time closing high of 6,930 reached on 30 December 1999, the peak of the dotcom boom.

Monday’s close was the second-highest ever recorded by the index and sets the stage for a new record high.

Vodafone jumped 4% following its share consolidation after a $130bn deal to exit its US joint venture, although shares in HSBC dropped 5% after the bank’s full-year results disappointed.

The London market was lifted by a rally on Wall Street, where the S&P 500 hit a record high before dropping back to close 0.62% up at 1,847. The Dow closed 0.6% up at 16,207 while the Nasdaq was 0.7% higher at 4,292.

Merger activity has offered a recent boost to investor confidence, with talks between Dixons and Carphone Warehouse in the UK while, in the US, RF Micro Devices agreed a $1.6bn merger with TriQuint Semiconductor.

Meanwhile, Facebook founder Mark Zuckerberg addressed a conference yesterday, describing recent acquisition Whatsapp as a bargain at the $19bn he paid for it.