The FTSE 100 finished the week 64. 42 points or 0. 83% higher at 7,778. 64.
US investment management company BlackRock reported stronger than expected profits from its fourth trading quarter after drawing further cash into its exchange-traded funds (ETFs).
Over the coming week, the market spotlight will be on a barrage of Chinese economic data and a key vote by delegates from Germany's Socialist party on whether to move ahead with formal negotiations to forge a grand coalition with Chancellor Angela Merkel's CDU.
Stocks on the Continent fared well at the end of the week as the two main German parties achieved a breakthough in negotiations to form a grand coalition after a marathon 24 hours of talks, boosting asset prices across the single currency bloc.
London stocks managed to carve out small gains, with the top-flight index hitting a record intraday high, even as pound jumped to its best level since the referendum after it was reported that Spain and Holland would back a soft Brexit deal.
US bank Wells Fargo announced on Friday that it was planning to close around 900 branches over the next four years as part of a cost-cutting initiative, despite having posted an immediate $3. 4bn boost to its profits resulting from reforms to federal tax laws enacted in December.
Founder of Facebook Mark Zuckerberg has announced Facebook will give priority to posts from friends over posts from companies or the media, with the aim of "having more meaningful social interactions".
JPMorgan Chase beat Wall Street's expectations for earnings in its fourth trading quarter, saying recent reforms to US tax laws would help boost profits, not only by cutting down the amount of tax the firm paid to the federal government but also by enticing more corporations to borrow further.
A new poll has found that a fresh vote on Brexit would overturn the 'leave' result of the first referendum. The results came after Brexiteer Nigel Farage unexpectedly suggested a second referendum the day before.
Wall Street's main market gauges are continuing to push higher, helped by another drop in the US dollar and as investors sift through earnings from the likes of JPMorgan and Wells Fargo.
London's FTSE 250 was up 0. 75% to 20,894. 21 by late afternoon on Friday, led by shares fuelled by positive broker comment.
Travel operator Tui was downgraded by JPMorgan Cazenove after its good share price run last year and what is expected to be a "less supportive" 2018, while SSP was upgraded as its shares offer an "attractive entry point".
London's FTSE 100 was up 0. 3% to 7,788. 20 in afternoon trade on Friday, having hit a record intraday high of 7,790. 96 earlier, led higher by engineer GKN.
The euro rose to a three-year high against the dollar on Friday as investors welcomed a breakthrough in German coalition talks.
Sterling rose to its best level since the Brexit vote on Friday on news that Spain and Holland's finance ministers have reached an agreement that would see the two work together to lock down a Brexit deal that would keep the UK as close to the EU as possible.
Language translation technology group SDL announced on Friday that, based on unaudited results, it was expecting to deliver an adjusted EBITDA for 2017 of approximately £22m after the firm saw language services division improve gross margins throughout the second half of the trading year.
The cost of living in the US jumped last month, pushed higher by a surge in the cost of used cars and trucks and medical care commodities.
SSP: JP Morgan upgrades to overweight with a target price of 765p.
Unite has urged the government to block what it called a "predatory" and "destructive" takeover bid for engineer GKN by turnaround specialist Melrose Industries.
European-focussed energy investor Prospex Oil and Gas announced on Friday that flow-testing at the Podere Maiar-1 well in Italy had begun, with results from the testing expected to be available before 19 January.