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U.K. stocks end fractionally lower as polls turn up election nerves

U.K. stocks fell for a second straight day on Tuesday, albeit
finishing just barely lower. Investors remained cautious ahead
of the U.K. general election on Thursday, as polls point to an
increasingly tight race.

The FTSE 100 index

UKX, -0.01%

 fell less than 0.1% to close at 7,524.95, slightly
extending a 0.3% loss from Monday.

The almost-imperceptible pullback came as traders geared up for
closely watched events later in the week. On Thursday, British
voters head to the polls, the European Central Bank holds a
policy meeting, and former Federal Bureau of Investigation
Director James Comey will testify to a Senate panel about
alleged Russian interference in U.S. affairs.

“The U.K. election remains the standout event for most, with
the outcome being so important for Brexit negotiations over the
next couple of years,” said Craig Erlam, senior market analyst
at Oanda, in a note.

“The Conservative lead over Labour has collapsed, if the polls
are to be believed, and it seems that the only thing that [U.K.
Prime Minister] Theresa May currently has on her side now is
time, with Labour still having a lot to do and only two days in
which to achieve it,” he added.

A poll released late Monday by Survation put May’s Conservative
Party one point ahead of opposition Labour, down 16 points from
a month ago. The Telegraph’s poll tracker has the Tories ahead
by 7 points, compared with a lead of more than 20 points in
April.

Read: 5 things to know about the U.K. general
election this week

The pound

GBPUSD, -0.1395%

 held up surprisingly well on Tuesday, shaking off the
latest election jitters. Sterling bought $1.2895, down slightly
from $1.2903 late Monday in New York, after an earlier gain
faded.

“Whether this reflects a lack of faith in the polls or just
those that point to a much tighter race isn’t clear, but there
doesn’t appear to be much election risk being priced in, which
in itself concerns me given what’s happened previously,” Erlam
said.

The U.K. currency has in recent weeks traded at the mercy of
opinion polls, sliding on signs May’s Tories are losing voters’
support.

Stock movers: Shares of Burberry Group PLC

BRBY, -3.70%

BURBY,
-3.59%

 fell 3.7% after HSBC cut its rating on the
luxury goods company to reduce from hold, according to media
reports.

Budget airline EasyJet PLC

EZJ, -0.37%

 closed 0.4% lower, as it couldn’t hold on to gains that
came after it said passenger traffic rose 9.5% in May.

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