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U.K. stocks slip as polls turn up election nerves

U.K. stocks declined for a second straight day on Tuesday, as
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, -0.24%

 fell 0.2% to 7,510.19, building on a 0.3% loss from
Monday.

The slight 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 its 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, +0.1085%

 held up surprisingly well on Tuesday, shaking off the
latest election jitters. Sterling bought $1.2933, up from
$1.2903 late Monday in New York.

“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, -2.87%

BURBY,
-0.39%

 fell 2.6% after HSBC cut its rating on the
luxury goods company to reduce from hold, according to media
reports.

EasyJet PLC

EZJ, +1.26%

 added 1.2% after the budget airline said passenger
traffic rose 9.5% in May.

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