FTSE 100 hits more than a two-month low

The blue-chip FTSE 100 dropped 0.6% at 8,121.2, while the mid-cap FTSE 250 was declined 0.1%

London's benchmark stock index closed at more than a two-month low on Tuesday as investors were cautious ahead of parliamentary elections, although rise in oil prices helped offset the declines.

The blue-chip FTSE 100 dropped 0.6% at 8,121.2, while the mid-cap FTSE 250 declined 0.1%. The pound added 0.2% against the dollar and was last at $1.2676.

Markets were clouded with caution as polls indicated the Conservatives looked set to be replaced after 14 years in voting on July 4.

Financial markets do not like uncertainty, there is still an uncertainty as to Labour getting an absolute majority or not and therefore, investors have just taken money off the table, according to Axel Rudolph, senior market analyst at IG Group.

Among sectors, nonlife insurers dropped the most, declining 2.5%, as Hurricane Beryl intensifies.

Insurer Beazley was the biggest casualty on the FTSE 100, dropping 5.2%, and leading declines for the nonlife insurers.

Oil giant BP added 1.3% after oil prices, held near two-month peaks on expectations of rising fuel demand for the summer travel season and possible U.S. interest rate cuts.

GSK slid 1.5% after a Delaware judge rebuffed a request by the drugmaker and others to appeal a ruling allowing more than 70,000 lawsuits to go forward claiming the heartburn drug Zantac caused cancer.

Sainsbury's, Britain's second biggest supermarket group, dropped 2.9% after it kept its annual financial guidance as it reported a 3% increase in first-quarter underlying sales.

In the U.S., Fed Chair Jerome Powell said the U.S. central bank still needs more data before reducing interest rates to ensure that recent weaker inflation numbers give a true picture.