BLUE-CHIP stocks shrugged off the Government’s spending review yesterday as big gains in the mining sector helped the top tier move higher.

Investors gave little reaction to Chancellor George Osborne’s deficitbusting measures, which were largely as expected.

A rebound on the Dow Jones Industrial Average in the US helped give London’s FTSE 100 Index a boost, up 25 points to close at 5728.9.

Trading earlier in the session had been lacklustre, with the Bank of England’s latest minutes failing to provide direction.

The report offered few clues on quantitative easing as the bulk of the Monetary Policy Committee continued their wait-andsee approach.

The mood in the resources sector was helped by September production numbers from BHP Billiton after the mining group maintained output across the bulk of its commodities.

Xstrata rose 42.5p at 1291p, while the upbeat report from BHP meant its shares rose 53.5p to 2192.5p.

BAE Systems fell more than four per cent as the stock turned ex-dividend – meaning new investors will not take part in the next shareholder payout – and as investors digested the impact of the Government’s defence spending review on shares in the sector.

With an order for BAE’s Nimrod aircraft among the casualties, the blue-chip stock fell 14p to 349.9p.

Banks were in the spotlight again as the Chancellor announced a step forward in introducing the £2.5bn a year annual banking levy, with draft legislation due to be published tomorrow.

This followed a difficult session yesterday in the wake of China’s rate rise and a broker downgrade on Lloyds Banking Group.

Royal Bank of Scotland was 1p lower at 46p, while Lloyds dropped 0.2p to 70.3p.