* FTSE 100 down 0.3%, FTSE 250 down 0.1%
* Sterling strength hits exporters
* Markets to shut early on Tuesday ahead of New Year (Adds news item, analyst comment, updates share prices)
Dec 31 (Reuters) - London's FTSE 100 declined for the second straight session on Tuesday, as dealers booked year-end profits after the index's best run in three years and as a stronger pound hit shares of exporter firms.
The FTSE 100, which rose for 11 consecutive days earlier this month, fell 0.3% as a modestly firmer sterling dragged exporter stocks such as BAT and AstraZeneca lower.
The FTSE 250 edged 0.1% lower by 0845 GMT in thin trading, as most investors were away during another holiday-shortened week.
"As the New Year holiday is falling mid-week, I suspect we will have to wait until Monday to see which way financial markets wish to throw the kitchen sink as the new budget year begins," OANDA analyst Jeffrey Halley said.
Receding worries around the U.S.-China trade situation, British politics and Brexit have fueled sharp gains for UK markets in December.
That has put the FTSE on course for its best month since June and its biggest annual gain since 2016. The midcaps look set for their best month since January and their best yearly performance since 2013.
Investors would now shift focus to 2020, looking for the finer details of a Phase 1 U.S.-China trade deal, as well as Britain's negotiation of a free trade agreement with the European Union.
Hopes of concrete progress on the trade front were bolstered on Monday when White House trade adviser Peter Navarro said the United States and China would likely sign a deal early next year.
UK markets will shut early on Tuesday and remain closed for New Years Day on Wednesday. (Reporting by Shashwat Awasthi in Bengaluru; Editing by Rashmi Aich)