(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)
* FTSEurofirst 300 hovers near three-month highs
* VW surges on signs of deal with U.S authorities
* Ericsson slumps after weak Q1 results
By Sudip Kar-Gupta
LONDON, April 21 (Reuters) - European stocks were little changed on Thursday, as German carmaker Volkswagen outperformed while Swedish mobile telecom equipment maker Ericsson slumped.
Markets were holding their ground before a European Central Bank meeting later in the day. The ECB is widely expected to leave interest rates unchanged at record lows.
However, ECB President Mario Draghi is likely to reinforce his support for its ultra-loose monetary policy measures, which have bolstered European stocks even though European and global economic data has weakened.
The pan-European FTSEurofirst 300 index was flat, hovering around three-month highs reached earlier in the week. The euro zone’s blue-chip Euro STOXX 50 index rose 0.2 percent.
“We’ve had a great run-up in the last few weeks and we’re now just starting to pause for a bit on the markets,” said Terry Torrison, managing director at Monaco-based McLaren Securities.
“I don’t think Draghi will say much apart from his usual dovish rhetoric, and I think markets could drift back down after the ECB today,” he said.
Shares in Volkswagen rose 6.2 percent after sources told Reuters that VW and U.S. officials had reached a framework deal for the automaker to buy back almost 500,000 diesel cars with software that enabled them to evade U.S. emission rules .
But shares in Ericsson slumped 9 percent after it posted first-quarter sales and operating profit lower than markets expected.
“Q1 results will disappoint, missing consensus at all levels,” said Mirabaud Securities’ analyst Susan Anthony, commenting on Ericsson’s results. “Clearly hard work ahead and nothing much to cheer about.”
Today’s European research round-up
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Mike Dolan, Markets Editor EMEA. (Editing by Larry King)