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Market Update

European Markets Close Flat, Centrica to Raise £700M to Pay Debt

Author: Lucy Stoeva
Last Update: 2:26 PM ET May 05 2016

4:00 PM Frankfurt, Germany – European stock market indexes closed little changed after a choppy session. Concerns over China’s services sector offset a rally in oil prices and positive earnings reports from BT and Repsol. Centrica announced plans to raise £750 million to fund its acquisitions and cut debt.

European stock markets closed flat on Thursday after concerns over a slowdown in China’s services sector offset a rally in oil prices and positive earnings reports from BT and Repsol.

Trading volume was thin because of the observance of Ascension Day in Scandinavia, Switzerland, and Austria.

Oil prices rose on the news for decreasing output from Canada due to wildfires. Brent crude oil futures climbed 1.55% to $45.31, while West Texas Intermediate crude oil jumped 2.2% to $44.73 per barrel.

Royal Dutch Shell stock gained 1.3%, Tullow Oil surged 6.1%, Seadrill advanced 2.4%, and Total inched up 0.9%.

Repsol surged 4.7% after the Spanish largest energy company posted a declining, but better-than-expected first-quarter profit.

BT Group was among the top performers, up 2.7%, after the British telecom posted 6% growth in full-year profit, driven by broadband services and sports channels.

Mining stocks rebounded from recent losses, tracking the prices of metals. Shares of Anglo American advanced 1.8%, Antofagasta added 1.6%, and Glencore rose 0.3%.

On the negative side, Centrica tumbled 9.8% after the British energy supplier announced a share sale to pay off debt and fund its acquisitions.

In economic news, a private survey in China showed the service industry grew at a slower pace in April.

The Caixin services purchasing managers'' index (PMI) was 51.8 for April, down from 52.2 in March, but still in expansion mode above 50.

In the U.K., the Markit/CIPS purchasing managers’ index for the services sector fell to 52.3 in April from 53.7 in March, hitting a 38-month low due to economic uncertainty and the Brexit referendum on June 23.

In London, the FTSE 100 index lost 3.03 to 6,108.99, while in Frankfurt, the DAX index added 23.61, or 0.24%, to 9,851.86.

In Paris, the CAC 40 index fell 4.77, or 0.1%, to 4,319.46.

Centrica Plc tumbled 9.8% to 208.5 pence after the U.K. energy supplier announced plans to raise £750 million through a private shares placement to fund its acquisitions, decrease debt, and improve its credit rating.

Rolls-Royce Holdings Plc lost 2.3% to 630 pence after the aircraft engine maker said it expects break-even results for the first-half of the year.

RSA Insurance Group Plc jumped 2% to 478.80 pence after the insurer signaled that first-quarter operating and net profit would be above expectations.

Wm. Morrison Supermarkets Plc rose 2.4% to 192 pence the supermarket chain operator reported first-quarter growth of 0.7% in comparable revenues, excluding fuel.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc