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 per cent.

“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 per cent after sources told Reuters that VW and US officials had reached a framework deal for the automaker to buy back almost 500,000 diesel cars with software that enabled them to evade US emission rules.

But shares in Ericsson slumped 9 per cent 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.”

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