* ECB keeps stimulus going, sees inflation as temporary
* Volkswagen drags auto index lower
* Food and beverage, tech stocks offer silver lining
(Updates with ECB, German inflation)
By Anisha Sircar and Ambar Warrick
Oct 28 (Reuters) - European stocks struggled for direction
on Thursday on a batch of mixed earnings reports, as the
European Central Bank kept its massive stimulus taps open and
maintained its view that a recent spike in inflation would be
temporary.
The pan-European STOXX 600 fell 0.1% as optimism
over strong earnings in the food and beverage and
technology sectors was offset by weak showings in
energy, travel and automobile stocks.
Beer brewer Anheuser-Busch InBev surged 8% on a
surprise rise in third-quarter profit, while French IT services
provider Capgemini added 5.7% on strong earnings and
outlook.
Equity markets reacted little to the ECB's decision, which
came in largely as expected. The bank is likely to make a
decision on its pandemic-related emergency stimulus in December.
"If you're an equity trader, you're flying. There's still no
sign that monetary policy is going to be tightened," said Stuart
Cole, head macro economist at Equiti Capital.
But investors questioned the bank's stance on transitory
inflation, with preliminary data on Thursday showing consumer
prices the euro zone's largest economy rose more than expected
in October.
"Some of the strength in the German figure were as a result
of base effects, but even taking this into account it is hard
not to conclude that inflationary pressures are increasing,"
Equiti Capital's Cole said.
German stocks fell 0.2% after the data.
Volkswagen, Europe's largest carmaker, dropped
3.3% after cutting its outlook for deliveries and reporting
lower-than-expected quarterly profit due to the global chip
crunch. The wider auto index fell 0.8%.
Swedish online gambling firm Evolution slumped
11.2% after a disappointing quarterly report.
Oil major Royal Dutch Shell dropped 1.1% after
reporting a third-quarter profit that came in below
expectations, hitting shares of peers BP and
TotalEnergies.
European stocks are still set for strong gains in October on
a swathe of positive earnings, which pushed the STOXX 600 close
to record highs.
Profits for Europe Inc are expected to increase 52% in the
third quarter from last year, according to Refinitiv data.
Airbus rose 1% after the world's largest commercial
planemaker raised its full-year financial targets.
Lloyds Banking Group rose 1.7% as it upgraded its
outlook after posting a better-than-expected quarterly profit.
(Reporting by Anisha Sircar and Aaron Saldanha in Bengaluru;
Editing by Subhranshu Sahu, Anil D'Silva and Christina Fincher)
