By Carla Mozee, MarketWatch

U.K. stocks dropped Thursday, with investors taking a hands-off approach as Britons headed to the polls to vote in what's been called the tightest general election in generations.

The FTSE 100 fell 0.7% to 6,886.95, in part on losses in the heavily weighted energy and basic materials sectors.

The midcap FTSE 250 , whose constituents tend to have greater exposure to the U.K. economy, however, pulled out a win, finishing up 0.2% at 17,447.96.

The pound (GBPUSD) late Wednesday traded at $1.5224, down from $1.5247 Wednesday in New York.

Opinion polls point to the likelihood that the election will result in a hung parliament, where no party has a majority. The main political parties, the Conservative Party and the Labour Party, will likely have to negotiate with smaller parties to form a coalition government or reach an agreement for a minority government. Under a minority government, one party would lead, but find support on an issue-by-issue basis from another party. Read: 7 things you need to know about the U.K. election (http://www.marketwatch.com/story/7-things-you-need-to-know-about-the-uk-election-2015-05-06)

(http://www.marketwatch.com/story/7-things-you-need-to-know-about-the-uk-election-2015-05-06)The first indications of the election outcome won't emerge until after polls close at 10 p.m. London time, or 5 p.m. Eastern Time.

"Watch out for the volatility," on the pound, said Richard Perry, market analyst at Hantec Markets, in at note. "Cable is a tough call in the next two days with so many fundamental drivers," including Friday's U.S. jobs report for April.

Back to stocks, BT Group PLC shares finished 0.3% lower. They had been higher earlier Thursday after the telecommunications group's fiscal fourth quarter net profit beat expectations on cost-cutting efforts and a boost from its sports TV channels (http://www.marketwatch.com/story/bt-profit-lifted-by-cost-cuts-sports-channels-2015-05-07-24852536).

Aviva PLC shares climbed 2.6% as the insurer posted a 14% rise in first-quarter new business (http://www.marketwatch.com/story/aviva-new-business-up-14-turnaround-on-track-2015-05-07), and said its turnaround efforts are ahead of schedule.

But Wm Morrison Supermarkets PLC fell 1.6% following the company's report of a drop in first-quarter sales (http://www.marketwatch.com/story/morrisons-q1-sales-down-on-restructuring-costs-2015-05-07).

GlaxoSmithKline PLC shares fell 4.5% in the wake of the company's decision to drop plans to create a separate company centering on drugs to treat HIV.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires