7 July 2005, 12:31  London shares open lower as oil, BOE rate decision weigh

Leading shares fell in early deals as record oil prices and caution ahead of the Bank of England's interest rate decision prompted widespread profit taking - with Diageo a major casualty after a mixed update, dealers said. At 9.03 am, the FTSE 100 was down 20.7 points at 5208.9, with the wider market mixed. Meanwhile, US stocks slumped on news crude future prices broke above 61 usd to reach an historic high yesterday. And in Asian trade crude broke new records with the benchmark New York contract rising to 61.53 usd on possible disruption to production from tropical storms in the Gulf of Mexico. The Dow Jones Industrial Average closed down 101.1 points at 10,270, the S&P 500 down 10 points at 1,194 and the Nasdaq off 10.1 points at 2,068. Away from oil, investors will also scrutinise the latest weekly jobless claims data to garner further indications of the health of the US economy. The market is looking for 317,000 new claims compared with 310,000 previously. And in Asia overnight the mood was mixed, with the Nikkei ending 13.39 points lower 11,590.14, while the Hang Seng index closed for lunch up 0.38 at 14,150.31 Back in London, all eyes will be on the the MPC's interest rate decision at noon, with most watchers expecting rates to be left unchanged at 4.75 pct.

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