The domestically focused FTSE 250 index, considered a barometer for Brexit sentiment, closed 0.9% higher, with shares in Micro Focus International surging 31.2% after the software firm forecast a higher annual margin.
The EU's Trade Commissioner said on Wednesday Britain and the bloc were in the last moments to reach a Brexit trade deal.
"There are no guarantees a Brexit agreement will be reached but if one can be secured it would likely be a positive catalyst for UK stocks in the long run - removing a key source of uncertainty which has weighed heavily for more than four years," said AJ Bell investment director Russ Mould.
After falling nearly 0.6% in morning trade, the blue-chip index ended 0.3% higher, after Pfizer Inc disclosed final results from its late-stage COVID-19 vaccine trial that showed it was 95% effective.
Cyclical stocks such as banks <.FTNMX8350>, housebuilders <.FTNMX3720> and energy companies <.FTNMX1770> rose, although a stronger pound capped gains on the index.
"The initial leg up of (vaccine news) is probably priced in already. There's still lots of headwinds to growth and activity from the renewed lockdowns and so investors may be just being a little bit cautious." said Ian Williams, economist and strategist at Peel Hunt.
Britain on Wednesday reported further 529 COVID-19 deaths and 19,609 cases, a day after it recorded its highest daily death figure since May.
Meanwhile, official data showed British inflation ticked higher in October to 0.7%.
RSA Insurance Group jumped 4.6% after it agreed a 7.2 billion pounds cash takeover offer by overseas rivals.
Halfords Group Plc fell 4.6% after the bicycles and car products retailer sounded cautious about its second-half outlook due to lockdowns.
(This story has been refiled to fix typo in paragraph 7)
(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu and Mark Potter)
By Devik Jain