UPDATE 2-London shares end higher on vaccine hopes, set for weekly gains

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* Primark owner gains on upbeat trading update
* Strong U.S. jobs report bolsters risk appetite
* FTSE 100, mid-caps set to end week with gains
* Meggitt up on signs of recovery in aerospace industry
demand
* FTSE 100 up 1.3%, FTSE 250 up 1%

(Updates prices to close, adds comments)
By Shreyashi Sanyal
July 2 (Reuters) - London shares closed higher on Thursday
as signs of progress in developing a COVID-19 vaccine bolstered
hopes of a post-pandemic economic recovery, while Primark-owner
Associated British Foods gained after issuing an upbeat trading
update.
The blue-chip FTSE 100 .FTSE rose 1.3% and the mid-cap
FTSE 250 .FTMC 1% as a COVID-19 vaccine from Pfizer PFE.N
and Germany's BioNTech BNTX.O was found to be well tolerated
in early-stage human trials. MKTS/GLOB
Appetite for global equities heightened after data showed
record employment growth in the United States at 4.8 million job
additions, even as layoffs remained elevated and COVID-19 cases
across the country spiked.
AB Foods ABF.L rose 4.1% to its highest in nearly a month,
as it said trading in the Primark fashion stores that had
reopened from a coronavirus-led lockdown had been "reassuring
and encouraging". The FTSE 100 has rebounded sharply since a
coronavirus-driven crash in March, but is still down about 17%
on the year with investors closely tracking reports of a
resurgence in COVID-19 cases, which could lead to another
shutdown.
"The spike in COVID-19 cases could slow things down some
going forward, but for now, the stock market only cares about
one thing and that is the reopening," said by Ryan Detrick,
senior market strategist at LPL Financial.
Pressure is also mounting on the UK to agree to a free trade
deal with the European Union before the end of the year, when a
transition period expires. Travel stocks .FTNMX5750 added 2% as a report said the
British government will end quarantine rules for those arriving
from 75 countries so that people can go on holiday. Engineering company Meggitt MGGT.L jumped 6.2% after it
said on Thursday there were initial signs of a recovery in
airline industry demand after a difficult first half.