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Market Update

European Markets at Two-Month Lows, U.K. Rates on Hold

Author: Lucy Stoeva
Last Update: 10:53 AM ET December 10 2015

4:00 PM Frankfurt – European market indexes extended losses and hovered near two-month lows. Accor agreed to acquire three luxury hotel brands for $2.9 billion. Centrica jumped after reassuring operating profit outlook. Ocado fourth-quarter revenues soared 17% to £1.2 billion.

European stock markets declined on Thursday, briefly touching a two-month low in a seesaw trading as pessimism dominated investor sentiment.

Oil prices continued to decline after the Organization of the Petroleum Exporting Countries’ reported that production rose by 230,000 barrels a day in November to 31.70 million.

The Bank of England left its main lending rate unchanged at 0.5% and the inflation remains low and the central bank guided the rate of inflation is likely to be below 1% until the second-half of next year.

The central bank also preserved its asset-purchase program for £375 billion.

In London trading, FTSE 100 index slipped 34.6 or 0.6% to 6,092.35 and in Frankfurt the DAX index slid 0.60 to 10,590.32.

In Paris, CAC 40 index edged down 2.99 to 4,637.67.

Accor SA gained 0.5% to €39.06 after the France-based hotel operator agreed to acquire the holding company of the luxury hotels Fairmont, Raffles and Swissotel, for about $2.9 billion in cash and stock.

The company agreed to pay 46.7 million new shares and €768 million, or $840 million, in cash for FRHI Holdings Ltd.

Centrica Plc jumped 3.6% to 213.60 pence after the U.K.-based residential energy service provider said it its profits are on track due to cost cutting measures.

Centrica plans to reduce capital expenditure to less than £800 million in 2015 and below £600 million in 2016.

The company expects operating cash flow for the year of more than £2 billion despite weakness in commodity prices and power generation margins.

Ocado Group Plc declined 4.8% to 342.10 pence after the U.K.-based online grocery retailer said it may not sign a previously announced deal with an overseas grocer, despite being in talks with multiple companies.

The group sales in the fourth-quarter ending on November 29 surged 15% to £381.6 million from a year ago, while annual group sales soared 17.3% to £1.20 billion.

Ocado had cash and cash equivalents of £45.8 million, external borrowings of £53.2 million, and additional revolving credit facility of about £210 million.

Sports Direct International Plc tumbled 10.3% to 596.82 pence after the U.K.-based sports goods retailer reported revenues in the first-half ending on October 25 edged up 0.1% from a year ago to £1.43 billion.

Net profit in the period surged 27.9% from a year ago to £147.5 million compared to £115.3 million and diluted earnings per share increased to 23.1 pence from 18.6 pence.

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