UPDATE 2-BP shares get transition lift in cautious European market

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* BP surges after results, lifts energy sector
* Investors await details on U.S. fiscal stimulus
* Diageo slides after weaker-than-expected FY sales
* Intesa seeks to boost dividend in 2021, shares jump

(Updates to market close)
By Sruthi Shankar
Aug 4 (Reuters) - 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 .STOXX recouped some of the losses in late afternoon
trading to close 0.1% lower.
BP BP.L 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 .SXEP rose 2.5%, with other
growth-linked cyclical sectors such as automakers .SXAP and
banks .SX7P also rising.
By contrast, Johnnie Walker whisky maker Diageo's DGE.L
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 BAYGn.DE 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. "Overall, the decline (in earnings) isn't quite as large as
people had feared. However, that is not feeding through into
people upgrading their estimates for the rest of the year," said
Matt Siddle, portfolio manager, Fidelity Funds European Growth.
"The rate of how rapidly sales were recovering in June -
because that was a much better guide for what will happen in the
second half of the year - has not tended to give enough
confidence to upgrade."
After a recovery from March lows that has seen the STOXX 600
climb nearly 36%, markets have wobbled in recent weeks on
concerns about a resurgence in coronavirus cases. Doubts over the progress of a U.S. coronavirus aid package
and a diplomatic tussle over Chinese tech companies' operations
in the United States also kept investors on edge.

Banking-heavy Italian .FTMIB and Spanish .IBEX 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 ISP.MI , which just sealed a takeover of
smaller rival UBI UBI.MI , gained 5.0% after saying it would
seek clearance to return more cash to shareholders.