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FTSE 100 dips, as pound gains after fresh poll shows solid Tory lead

U.K. stocks stepped lower Monday, weighed down by a gain in the
pound after a fresh poll signaled a double-digit lead for the
governing Conservative Party as a general election nears.

A terror attack in London over the weekend has added to the
uncertainty around Thursday’s vote, but the Guardian/ICM poll
out Monday suggested a change in government is unlikely.

The FTSE 100

UKX, -0.30%

 fell 0.3% to 7,522.08, while sterling

GBPUSD, +0.0698%

traded at $1.2909, up from $1.2891 late Friday in New York.

Earlier Monday, the FTSE had been edging higher, while the
pound dropped.

The new survey, the Tories enjoy
a 11-point lead over the Labour Party.

“That’s one of the biggest gaps that we’ve seen for a while,”
said Jasper Lawler, senior market analyst at London Capital
Group. The poll looks like the dominant factor in U.K. markets
on Monday, as oil’s


LCOQ7, -0.20%

 rally isn’t helping the FTSE that much, Lawler added.

See: Oil prices higher after Saudi Arabia, other
Middle East nations cut ties with Qatar

The pound is “expected to remain volatile this week against the
backdrop of the tragic weekend events in London and the
flakiness of the polls in predicting what the outcome of
Thursday’s general election vote is likely to be, with the poll
gaps varying between 1 and 12 points in favor of the
Conservatives,” said Michael Hewson, chief market analyst at
CMC Markets UK, in a note.

The FTSE 100 tends to benefit from a falling pound, as the
weaker currency boosts the foreign-denominated profits made by
the index’s multinational companies.

On Saturday, attackers with a van mowed down
pedestrians at London Bridge, then got out and began stabbing
bystanders in nearby Borough Market. Police moved quickly and
killed the attackers, but seven people died in the rampage and
dozens were injured, 21 of them seriously.

Read: 5 things to know about the U.K.’s general
election next week

And see: U.K. election—the worst, best and most-likely
scenarios for stocks

Police have arrested 12 people in raids prompted by
the attack, which interrupted the campaigning for the election
and shook confidence in Britain’s
counterterrorism strategy

Last week, the FTSE 100 — which has been scoring record closes
in recent sessions — was flat for the week.

Individual movers: Shares in British Airways
parent International Consolidated Airlines Group SA

IAG, -1.40%

 and easyJet PLC

EZJ, -2.09%

 traded 1.3% and 2.2% lower, respectively. Following
terror attacks, airlines often have seen brief declines in
reservations by passengers.

Over in the midcap FTSE 250, Ocado Group PLC

OCDO, +3.64%

 jumped 3.7% after the online grocer announced a deal with
a regional European retailer who will use Ocado’s software
platform. Analysts noted the customer’s name and other details
haven’t been released yet.

The overall FTSE 250

MCX, -0.31%

 was down 0.3% at 19,941.93.

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