(Bloomberg) -- European stocks gained as the Bank of England left interest rates on hold but kept alive hopes of cuts, following the Swiss central bank’s unexpected decision to reduce rates.

The Stoxx 600 Index was 0.9% higher by the close in London, with the technology, real estate and mining sectors leading the gains. The main equities benchmark in Zurich rose 0.6% after Swiss National Bank’s second rate cut this year, while the FTSE 100 was 0.8% higher following the rates decision as the country’s central bank hinted that more policymakers may be close to backing interest rate cuts.

Among individual movers, Evotec SE rallied following a report that the German drug developer is speaking to defense advisers after a decline in its share price prompted fears about the company’s vulnerability to a takeover. Societe BIC SA slumped by the most on record after the French maker of pens and lighters downgraded its sales guidance.

Sentiment remains fragile after this month’s call of a snap French election unleashed turmoil through markets. The rally in the main regional index has stalled in June and it is now about 8% higher since the start of the year. In the face of recent events, investors are switching exposure more toward laggard stocks and defensive plays.

The UK central bank left its benchmark lending rate on hold at a 16-year high of 5.25% on Thursday. Norges Bank left Norway’s benchmark interest rate unchanged, as economists expected, and said a tight policy stance will be kept for somewhat longer. 

In France, the Treasury raised €10.5 billion ($11.3 billion) through auctions of three- to eight-year bonds in its first bond sale since President Emmanuel Macron called the vote. The solid demand for the debt is a sign the political uncertainty is not deterring new buyers.

Market activity may be quieter than usual as traders ready for a quarterly event on Friday where index futures, equity index options and stocks options all expire in a process known as triple witching.

“Low volumes accompany the days before Friday’s expiry,” said Guillermo Hernandez Sampere, head of trading at asset manager MPPM. “The markets can calm down somewhat from the recent uncertainties, but global and monetary policy issues will determine the period ahead.” 

For more on equity markets:

  • Political Turmoil Accelerates Defensive Rotation: Taking Stock
  • M&A Watch Europe: Alpha Financial, Evotec, Sainsbury, Topdanmark
  • IPO Rebound in Europe Falters in Face of Volatility: ECM Watch
  • US Stock Futures Little Changed
  • Bang on Target: The London Rush

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--With assistance from Michael Msika and Sagarika Jaisinghani.

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