The London markets surged as traders were hopeful following news of progress regarding two drugs firms’ efforts to produce a coronavirus vaccine.
Positive vaccine news from US biotechnology giant Moderna and suggestions by Robert Peston that there has also been progress for the Oxford Covid-19 vaccine backed by AstraZeneca put a smile on the face of traders.
The FTSE 100 closed 112.9 points higher at 6,292.65p at the end of trading on Wednesday.
David Madden, market analyst at CMC Markets UK, said: “Stocks are driving higher on the back of optimism in relation to the possibility of a Covid-19 vaccine being developed.
“The bullish sentiment has rippled out across Europe, as the FTSE 100 briefly traded above 6,300, the CAC 40 hit its highest level since late March and the DAX 30 reached a mark last seen in late February.
“It is early days yet in regards to the development of a potential vaccine, but many traders are keen to buy into the market.”
The major European markets also leapt higher as a result of the positivity around progress on the potential vaccines.
The German Dax increased by 1.84%, while the French Cac moved 2.03% higher.
Across the Atlantic, the Dow Jones opened higher after the bell as a strong showing by Goldman Sachs helped it trade the right side of 27000 for the first time in exactly five weeks.
Meanwhile, sterling moved higher after the Office for National Statistics revealed that inflation rose to 0.6% in June on the back of price rises for video games and clothing.
The pound rose 0.22% versus the US dollar at 1.258 and was up 0.18% against the euro at 1.103.
Travel and hospitality stocks moved towards the top of FTSE as they particularly welcomed positivity surrounding the vaccine.
In company news, fashion giant Burberry saw shares slide after it revealed plans to cut around 500 jobs in the UK and globally.
Burberry said around 150 office jobs are expected to go in the UK, where it is headquartered, and a further 350 overseas as it looks to slash annual costs by a further £55 million. Shares fell 87.5p to 1,470p at the end of trading.
Elsewhere, Dixons Carphone closed significantly lower after it said that annual profits more than halved despite a surge in online sales.
Shares tumbled by 8.1p to 78.4p after it revealed a cautious outlook for the year ahead after a resilient performance throughout the coronavirus lockdown.
Online retailer Asos moved higher after it said it will repay furlough cash to the Government on the back of a sales jump as house-bound shoppers bought more “lockdown products”. Shares were up 116p at 3,489p at the close of play.
The price of oil moved higher even though there is continued talk that Opec is keen to taper off from the record production cuts that were introduced in May
The price of a barrel of Brent crude oil increased by 0.19 to 43.1 US dollars.
The biggest risers on the FTSE 100 were IAG, up 22.2p at 229.3p, Compass Group, up 83p at 1,184.5p, Whitbread, up 166p at 2,412p, and Ocado, up 131.5p at 2,120p.
The biggest fallers of the day were Burberry, down 87.5p at 1,470p, BT Group, down 2.15p at 113.45p, Morrisons, down 3.2p at 183.5p, and M&G, down 2.7p at 173.9p.