Pfizer revealed that a pill it has developed to treat Covid-19 cuts the risk of hospital admission or death by 89% in vulnerable adults, according to clinical trials, boosting overall market sentiment.
The FTSE 100 closed 24.05 points, or 0.33%, higher at 7,303.96 on Friday.
Danni Hewson, financial analyst at AJ Bell, said: “Whilst London markets aren’t seeing the record highs being set by some of their Wall Street brethren they’re not exactly hurting.
“The FTSE 100 hit a 2021 high today as investors backtracked on some of the defensive moves they’d made when they thought interest rates were going up.
“The more domestically focused FTSE 250 has also ended the week on a high note.
“Micro Focus International is up the most over the week, with investors rather liking its decision to sell off part of the business, and also a good run for Carnival after it closed a new funding deal, plus the cruise operator has also been buoyed by promising results from Pfizer’s Covid pill which has given many travel companies a reason to celebrate.”
IAG led the FTSE 100 after the company said it was seeing a “significant recovery” as passengers return to flying with lockdown restrictions easing.
Shares in the airline were 10.38p higher at 180.16p at the close of play.
The other major European markets also made positive strides as traders lapped up progress from the Pfizer drug, with the Dax reaching another record high.
The German Dax increased by 0.15%, and the French Cac improved by 0.76%.
In the US, the key markets continued their recent rallies to also hit record highs following a strong payrolls report for last month.
Meanwhile, sterling stalled again as it continued to swallow the fallout of the Bank of England’s surprise decision to hold interest rates.
The pound was flat versus the US dollar at 1.350, and down 0.02% against the euro at 1.167.
In company news, Rolls-Royce made strong gains on the FTSE as the engineer was buoyed by the Covid drug update amid hopes it could help the travel sector.
The company closed 7.86p higher at 142.94p as investors also particularly welcomed the strong update from key customer IAG.
Vimto maker Nichols also performed strongly following news from the firm that profits will be ahead of expectations.
Shares finished 75p higher at 1,200p at the close.
The price of oil jumped higher as Opec+ continued to suggest it will refrain from increasing supply.
Brent crude increased by 2.59% to 82.63 dollars per barrel.
The biggest risers on the FTSE 100 were IAG, up 10.38p at 180.16p, Rolls-Royce, up 7.86p at 142.94p, Informa, up 29.4p at 548.4p, and Melrose, up 6.95p at 167.55p.
The biggest fallers were Darktrace, down 21.5p at 577.5p, Kingfisher, down 9.7p at 332.5p, Croda, down 274p at 9,394p, and Ocado, down 47.5p at 1,725.5p.