The blue-chip FTSE 100 index <.FTSE> ended up 0.6 percent at 6,378.04 points.

Shire rose 3.2 percent, which traders attributed to speculation it was preparing a bid for U.S. peer Radius Health, seen as a potentially good deal for the British group. Shire declined to comment on the situation.

Traders added that expectations of new stimulus measures from China, the world's second-biggest economy, were giving equity markets a further lift.

Signs of a slowdown in China knocked back world stock markets in the third quarter, with the FTSE still down 4 percent since the start of 2015, and down around 10 percent from an April record high of 7,122.74 points.

"With half an eye on the possibility of more central bank stimulus, stocks have edged out a positive finish to the week," said CMC Markets analyst Jasper Lawler.

Burberry was among the worst performing stocks on the FTSE, falling 1.9 percent to extend the previous session's slide, as a profit warning late on Thursday from Hugo Boss hit luxury goods companies.

Hugo Boss cut its 2015 sales and profit outlook, while price target cuts from brokers on Burberry's shares on Friday added further pressure to the British company, whose shares had already slumped 8.3 percent on Thursday on weak sales growth.

GKN and other engineering stocks also fell after brokerage Liberum cut estimates on the sector.

(Additional reporting by Kit Rees; Editing by Toby Chopra and Mark Potter)

By Sudip Kar-Gupta