MILAN: A surge in BP shares after it laid out plans to cut its oil and gas output and boost investments in renewable energy offset disappointing earnings reports including from spirits maker Diageo, although European stocks closed largely flat.

After sliding as much as 0.6%, the pan-European STOXX 600 index recouped some of the losses in late afternoon trading to close 0.1% lower. BP rose 6.5% even as it cut its dividend for the first time in a decade and recorded a $6.7 billion quarterly loss.

The broader oil & gas sector rose 2.5%, with other growth-linked cyclical sectors such as automakers and banks also rising. By contrast, Johnnie Walker whisky maker Diageo's shares slid 5.6% after it reported a bigger-than-expected decline in underlying sales in nearly all markets.

German drugs and pesticides group Bayer slipped 2.4% as moves to settle lawsuits over its Roundup weedkiller contributed to a 9.5 billion euro ($11.2 billion) loss. Of the 223 companies listed on the STOXX 600 that have reported so far, nearly 62% have topped analysts' much-reduced expectations for profits, according to Refinitiv data. In a typical quarter, 50% beat earnings estimate.

Banking-heavy Italian and Spanish indexes were both higher, as data showed Italy standing out as the main beneficiary of the European Central Bank's efforts to support a virus-stricken euro zone economy. Intesa Sanpaolo, which just sealed a takeover of smaller rival UBI, gained 5.0% after saying it would seek clearance to return more cash to shareholders.