* ECB keeps stimulus going, sees inflation as temporary
* Volkswagen drags auto index lower
* Food and beverage, tech stocks offer silver lining
(Updates to market close)
By Anisha Sircar and Ambar Warrick
Oct 28 (Reuters) - European stocks closed slightly higher on
Thursday, buoyed by robust earnings from food and technology
stocks, 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 closed 0.2% higher with
food and beverage and technology sectors gaining
1.6% and 1.3%, respectively.
Beer brewer Anheuser-Busch InBev surged 10.3% on a
surprise rise in third-quarter profit, while French IT services
provider Capgemini added 6.0% on strong earnings and
outlook.
Anheuser-Busch was the top boost to the Belgian stock
benchmark, which jumped 1.7%.
But broader gains were held back by weak earnings from the
energy and automobile sectors.
Oil major Royal Dutch Shell dropped 3.0% after
reporting third-quarter profit below expectations, hitting
shares of peers BP and TotalEnergies
.
Equity markets reacted little to the ECB's decision, which
was 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 in 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 0.1% after the data.
Volkswagen, Europe's largest carmaker, dropped
4.5% 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
8.2%, and was among the worst performers on the STOXX 600 after
a disappointing quarterly report.
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 1.8% after the world's largest
commercial planemaker raised its full-year financial targets.
Lloyds Banking Group rose 1.3% as it upgraded its
outlook after posting a better-than-expected quarterly profit.
(Reporting by Anisha Sircar and Ambar Warrick in Bengaluru;
Editing by Christina Fincher and Bernadette Baum)
