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Lloyds soars but election concerns hamper FTSE

by: Alice Rigby
  • 05/05/2015
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Lloyds Banking Group has boosted the FTSE 100 this morning but politically-sensitive sectors have begun to feel the bite of election season.

Lloyds has risen more than 5% in morning trading, after posting impressive underlying profit growth for the first quarter.

The bank, still 20.9% owned by the UK government, surpassed market expectations in reporting underlying profit growth of 21%, despite also reporting a £660m loss from the sale of TSB.

The rise helped limit FTSE 100 falls in early trading, and by late morning the index had recovered to trade flat at 6,960.

Housebuilders were among those to come under pressure early on, with Barratt and Taylor Wimpey dropping 1.4% and 1.3% respectively. Centrica and United Utilities also dropped on concerns that Labour, which has proposed a freeze in energy prices, will gain power next week.

Asset and wealth managers were also hurt today, with the FTSE 100’s Hargreaves Lansdown and Aberdeen both dropping more than 2%. The likes of Legal & General, Schroders, Brewin Dolphin also fell between 0.5% and 1.5%.

Commentators have been warning for months that the election was likely to affect markets, but there have been few signs of broad-based uneasiness so far.

So far this year the FTSE has outperformed expectations, reaching historic highs in the last two months despite election concerns.

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