The London markets moved higher, helped by gains for tobacco companies following a confident update from British American Tobacco (BAT).
The FTSE 100 closed 26.64 points higher at 7,429.78 at the end of trading on Wednesday.
Markets across Europe were also optimistic on the back of better-than-expected US GDP figures for the third quarter and hopeful that positive trade talks between the US and China are on the horizon.
David Madden, market analyst at CMC markets UK, said: “Stocks are in positive territory heading into the close as traders are hopeful the US-China trade talks will bring about an agreement in the next few weeks.
“The discussions are in the ‘final throes’, according to President Trump, and from the Chinese side, it was reported they were ‘resolving relevant problems’.
“Traders are cautious not to get ahead of themselves too much as nothing is a done deal until everything is signed.”
The key European markets continued recent progress to close higher as traders welcomed the news, despite the US still being expected to impose fresh tariffs on Chinese imports next month.
The German Dax increased by 0.38% while the French Cac edged 0.09% lower.
Across the Atlantic, the Dow Jones and S&P 500 both opened higher on the back of trade optimism as well as the strong economic data.
Meanwhile, Sterling was relatively muted, edging higher in anticipation of the MRP political poll due later on Wednesday evening.
The value of the pound increased 0.16% versus the US dollar at 1.288 and rose 0.33% against the euro at 1.171.
In company news, BAT was one of the day’s big winners, as shares jumped after it said profit and revenue growth was at the upper end of its forecasts.
The company said it expects to capitalise on stronger vaping rules after a series of deaths linked to electronic cigarettes in the US, helping to drive other tobacco stocks higher.
Shares in the company closed 94p higher at 3,080p on Wednesday.
On The Beach shares lifted higher after the package holiday firm insisted the demise of Thomas Cook will boost trading despite seeing annual profits plunge after taking a hit from the firm’s collapse.
Shares in the travel firm jumped by 11.4p to 445.4p at the close of play.
ScS moved higher despite the sofa retailer reporting tumbling orders as shopper demand came under pressure amid Brexit and political uncertainty. Shares in the retailer increased By 3p to 225p.
Pub group Marston’s also saw shares improve despite tumbling to an annual loss after £43 million was wiped from the value of its property portfolio.
The brewing and pub group said it swung to a £20 million pre-tax loss for the year to September 28, sending shares 4p higher to 131.4p at the end of trading.
The price of oil plunged as the latest Energy Information Administration report revealed significantly higher-than-expected US stockpiles.
The price of a barrel of Brent crude oil slid by 2.18% to 62.68 US dollars.
The biggest risers on the FTSE 100 were Hiscox, up 42p at 1,362p, BAT, up 94p at 3,080p, Prudential, up 42p at 1,385p, and Auto Trader, up 16.2p at 564.6p.
The biggest fallers on the index were Rolls-Royce, down 25.2p at 715.8p, Meggitt, down 14p at 643.8p, Compass Group, down 40p at 1,875.5p, and Johnson Matthey, down 55p at 2,960p.