Shares track New York markets lower ahead of US rate decision

Shares in the UK and across Europe have tracked Wall Street lower after disappointing home sales data from across the Atlantic added to concerns about the strength of the world's largest economy ahead of a US rate decision later today.

The FTSE 100 fell 40 points, or 0.77%, to 5,207 dragged down by weaker mining stocks.

The Dow Jones Industrial Average fell 149 points, or 1.43%, to 10,293 and the S&P 500 was 18 points, or 1.61%, lower at 1,095 as oil stocks were hit by news that the US government is seeking to appeal against a court ruling that lifted a six-month ban on deepwater drilling.

All focus is now on the minutes from the Bank of England at 9.30am the US Federal Open Market Committee this afternoon. The US rate-setters are not expected to make any move on rates but the speech will be closely scrutinised for any change in wording on the state of the US economy.

Lloyds, though, is higher again, up 0.7p at 59.7p - having added more than 4% yesterday as most analysts agree the group is a clear winner from yesterday's emergency budget.

Royal Bank of Scotland shares also rose even though many agree the new tax will have a much greater impact on its business.

BP bounced 3.35p higher at 337.55p, having fallen 48% since 20 April. Chief executive Tony Hayward has been in Russia trying to reassure the Russian leader BP is still a good company to do business with despite the calamitous Gulf of Mexico oil spill.

Miners were lower with Xstrata down 27.5p at £10.20 and BHP down 36p at £19.52 as concern about the demand outlook weighed. 

On the second line, Kesa Electrical was 3.66% higher at 120.6p after results came in at the top end of expectations. The retailer which owns the Comet chain in the UK and Darty in France increased its dividend to 5.9p, ahead of market forecasts.