TUESDAY MARKET CLOSE: Lloyds shares dip

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Shares in Lloyds slipped yesterday amid speculation that the UK government could be about to start selling off its stake in the bank.

The stock was 1.43p lower at 74.26p amid reports that UKFI, the body set up to manage Britain’s holdings in the various bailed out banks, had told the Treasury that the time was ripe to start unloading Lloyds shares.

The FTSE 100 Index was also lower after the mining sector was dragged down by a sharp fall in profits at Fresnillo. The index slipped 15.37 points to 6,604.21 despite further positive news on both the UK and US economies.

Michael Hewson, senior analyst at CMC Markets, said: “Despite the economic backdrop continuing to brighten, investors appear reluctant to drive share prices significantly higher, on the basis of uncertainty about the timing or otherwise of continued central bank stimulus measures. It would appear that with markets at these elevated levels investors are taking the opportunity to cash in some chips as the slow holiday season gets underway.”

Shares in silver miner Fresnillo plunged 11 per cent to 924.5p even though a fall in profits was not unexpected due to lower metals prices. Fresnillo’s plans to cut its dividend translated into broader weakness across the sector with Randgold Resources and Vedanta each down more than 5 per cent, at 4,428p and 1,170p respectively.

Among the best performers, Holiday Inn owner Intercontinental Hotels pushed back towards three month highs after announcing a special dividend on the back of improved revenues per room. The shares jumped more than 6 per cent to 2,030p.

Asia-focused bank Standard Chartered was also an outperformer despite suffering a fall in profits as a result of its stuttering Korean business. The shares gained 43.5p to close at 1,567.5p.