European stocks struggle as Volkswagen offsets earnings cheer

European stocks struggled for direction on Thursday, one of the busiest days for earnings, as some leading automakers warned of production hit from chip shortages while a handful of companies reported upbeat results.

The pan-European STOXX 600 was down 0.01% in early deals, just as global stocks retreated from rallies on the back of supply chain snags highlighted in earnings reports.

Volkswagen, Europe's largest carmaker, dropped 2.7% after cutting its deliveries outlook and reporting lower-than-expected quarterly profit due to the global chip crunch. The wider auto index fell 0.7%.


Stellantis also cut its planned quarterly production by 30% due to the chip crisis, although its shares rose 2.1%.

On the bright side, Airbus added 2.8% after the world's largest commercial planemaker raised its full-year financial targets.

Anheuser-Busch InBev, the world's largest brewer, jumped 6.5% after lifting its full-year forecast as higher beer sales in Brazil boosted its quarterly earnings.

All eyes are on the European Central Bank meeting later in the day where policy is expected to remain unchanged, with the bank likely to push back against expectations for a rate hike next year.