FTSE's New Year rally continues

The London market’s New Year rally showed little sign of coming off the boil today despite uncertainty over the UK’s economic prospects.

Friday’s announcement that output shrunk by an estimated 0.3% in the final quarter of 2012 has had little impact on the FTSE 100 Index, which finished last week 19 points higher at a new four-and-a-half year high. It consolidated those gains today, with the top flight down by a modest 4.9 points at 6279.4.

The mood was helped by an upgrade to Japan’s growth forecast, with its government predicting the economy will expand by 2.5% in the coming fiscal year, thanks to a weakening yen and improved global demand for exports.

Miners were encouraged by this update as Eurasian Natural Resources improved 3.45p to 334.65p and copper miner Antofagasta added 10.5p to 1267.5p.

Financial stocks were also doing well, with HSBC ahead 4.05p to 714.4p and Asian-focused insurer Prudential up 5p to 952.5p.

Outside the top flight, shares in Hovis and Oxo owner Premier Foods were 9% lower after it announced the departure of chief executive Michael Clarke.

He has only been in the role for 18 months but is credited with taking important steps in tackling the company’s debt crisis. Premier moved swiftly to appoint former Cable & Wireless boss Gavin Darby as its new chief executive but shares still fell 12p to 108.5p.

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