The FTSE 100 has topped 5,600 for the first time since August 2001. The index is currently up 3.9 points, or 0.07%, to 5,600.9, led higher by drugmaker AstraZeneca after it said it was buying a cancer specialist firm to boost its drug pipeline.
Drugmaker AstraZeneca has added 17p, or 0.61%, to 2,795p, as the firm said it had agreed to buy privately owned UK biotechnology company KuDOS Pharmaceuticals for $210m in cash in its latest move to bolster its pipeline of new drugs.
Elsewhere, defence group BAE Systems has slipped 1p, or 0.26%, to 324p, despite recent news of a deal between Britain and Saudi Arabia to supply the world's top oil producer with new fighter jets.
Miners are supporting the market, with Xstrata gaining 7p, or 0.52%, to 1,345p, after gold prices firmed above $500 an ounce and Shanghai copper futures traded at record highs.
Meanwhile, BHP Billiton has added 8p, or 0.88%, to 921p, while Rio Tinto has climbed 13p, or 0.5%, to 2,634p.
The UK stock market closes four hours early today at 1230pm and will not reopen until Wednesday, December 28.
In Japan the stock market was closed today in honour of the Emperor’s birthday, but on Thursday the Nikkei 225 Stock Average ended up 0.1% to 15,941.37.
Meanwhile, in the US the Dow Jones Industrial Average gained 55.71 points, or 0.51%, to 10,889.44, as economic data showing tame inflation and strong profits at high-tech companies lifted investors' optimism about interest rates and the economy.
The positive economic data pushed up industrial companies and conglomerates, including Caterpillar and General Electric.
Heavy-equipment maker Caterpillar rose 2.4% to $58.45, as it was named Credit Suisse First Boston's top pick for 2006 in large-cap machinery.
Meanwhile, GE shares rose 1% to $35.42 after it agreed to buy Arden Realty for about $3.2bn, a major purchase in Southern California's booming real estate market.
Gains in insurer American International Group also helped boost the Dow. AIG's shares rose 2.2% to $67.90 after analysts at Merrill Lynch named the stock as one of Merrill's favourite buys.
In the technology sector, Research in Motion, the maker of the Blackberry wireless device, rose 11% to $68.72, a day after it posted better-than-expected profit.
Declining shares included Albertsons, which fell 3.4% to $23.28 on fears the grocery chain's plan to sell itself is in jeopardy.
Elsewhere, Microsoft weighed on major indexes after the European Commission threatened to impose daily fines on the company for failing to comply with antitrust sanctions. Microsoft called the decision unjustified, as its stock slipped 0.5% to $26.59.IFAonline
Gérald Harlin has been appointed executive chairman
Daunting without ad valorem feees
Elevated redemptions expected
'Should be forever young'
New manager likely to be appointed