The pan-European STOXX 600 index ended 0.3% higher, with oil stocks also aiding gains as crude prices recovered slightly. [MKTS/GLOB]
Swiss food giant Nestle gained 2.7% on an upbeat sales outlook after strong coffee sales and price hikes pushed organic sales 6.5% higher in the third quarter.
Europe's food and beverage index rose 1.7%, with Anglo-Dutch rival Unilever, which is due to give a trading update on Thursday, up 0.8%. The sector had dipped last session after downbeat results from Danone.
As the third-quarter earnings season unfolds, investors are fretting about the impact of higher costs, stemming from supply-chain problems and labour shortfalls, especially when central banks across the globe are planning to withdraw their stimulus measures.
"The bar (for earnings) that was set early this year is too high. It's going to be hard to beat that," said Anna Stupnytska, global macro economist at Fidelity International.
Kering tumbled 0.6% as sales growth at its star fashion brand Gucci missed analysts' expectations due to a sharp slowdown in its pace of recovery, particularly in Asia.
TS Lombard said it downgraded German and French equities as the heavy presence of automotive and luxury companies leaves them vulnerable to a slowdown in China, but still holds out hope for the broader region.
"Growth headwinds are mounting, but we believe that the recovery in the euro area has further to run," it said.
ASML Holdings, a key supplier to computer chip makers, fell almost 4% after its fourth-quarter sales forecast fell short of some analysts' estimates.
Drugmaker Roche beat revenue expectations and raised its 2021 sales forecast amid pandemic-driven demand. But its shares were down 1.6%.
Dutch paints and coatings maker Akzo Nobel slipped 1.3% as its quarterly earnings were hit by continued raw material inflation and supply chain disruptions, which it expects to continue through mid-2022.
Europe Inc earnings are expected to have risen 47.6% to 96.1 billion euros ($112 billion) in the third quarter, latest data from Refinitiv I/B/E/S showed, only a slight improvement from last week's 46.7% growth forecast.
Miner Rio Tinto slipped 3.3% as investors worried about spending after it announced a $7.5 billion plan to reduce carbon emissions.
(Reporting by Anisha Sircar in Bengaluru; editing by Uttaresh.V, Anil D'Silva and Ed Osmond)
By Anisha Sircar and Susan Mathew