Mining sector gains help propel FTSE into the black

Investors gave little reaction to Chancellor George Osborne's deficit-busting measures, which were largely as expected.

A rebound on the Dow Jones Industrial Average in America helped give London's FTSE 100 Index a boost, up 25.04 points to close at 5728.93.

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

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

Sterling remained robust in the face of the spending review, up by more than 1 per cent to 1.59 US dollars, although it fell marginally to 1.14 euros.

Stocks were helped by gains of more than 1.1 per cent in the US as Wall Street pulled back after plunging the previous session on concerns over growth in China sparked by its shock rate rise.

Mining stocks were propping up the Footsie in London as they too recovered from the China rate blow.

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

Xstrata rose 421/2p to 1291p, while the upbeat report from BHP meant its shares rose 531/2p to 21921/2p.

BAE Systems fell by more than 4 per cent yesterday 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 3497/8p following a decline of almost 2 per cent the previous night.

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 today.

This followed on from a very difficult session on Tuesday in the wake of China's rate hike and a broker downgrade on Lloyds Banking Group.

Royal Bank of Scotland was 1p lower at 46p, while Lloyds dropped 1/4p to 701/4p.

In corporate news, the owner of catalogue chain Argos said it was approaching the key Christmas trading period cautiously after posting a slide in profits. Home Retail Group reported an 11 per cent drop in pre-tax profits to 103m in the 26 weeks to August 28, after a slight fall in sales to 2.7bn.

Shares were 51/4p lower to stand at 2143/4p

Meanwhile, a cautious outlook statement from Sports Direct International offset any cheer from its forecast that first half-year profits will be well ahead of last year. Shares were down 35/8p at 1437/8p.

And haulage firm Stobart Group dropped 9 per cent, or 131/2p to 143p, after it made a slight downward revision to its full-year profit hopes due to the impact of Network Rail spending cuts at its rail maintenance operation.

Shares in foods group Uniq were higher after it unveiled radical plans to transfer 90 per cent of the firm's equity to its pension scheme in a fresh attempt to resolve a mammoth funding deficit. Shares rose 3/4p to 73/4p.

The biggest risers were Autonomy Corporation ahead 61p to 1505p, Xstrata, Anglo American ahead 891/2p to 2871p and Smith & Nephew up 171/2p to 568p.