UPDATE 2-European stocks eke out gains at start of holiday-shortened week

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Goldman Sachs raises year-end target for STOXX 600

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German institutes cut 2024 GDP forecast to 0.1%

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Direct Line slides after Ageas walks away from deal

(Updated at 1657 GMT)

By Sruthi Shankar and Johann M Cherian

March 25 (Reuters) - European stocks inched up to close at record high levels on Monday at the start of a holiday-shortened week as investors digested recent big gains spurred by dovish views from major central banks.

The STOXX 600 index climbed 0.1% boosted by a 0.9% gain in energy stocks, while media companies were among the top losers.

The Federal Reserve last week reiterated its projection that it would cut interest rates by 75 basis points by the end of the year, while the Bank of England (BoE) said the economy was heading in the right direction for rate cuts.

Meanwhile, the Swiss National Bank (SNB) surprised markets by reducing borrowing costs by 25 basis points.

Investors expect the Fed, the European Central Bank and the BoE to each deliver only 75 basis points of cuts by the end of this year, in three 25 basis point moves.

"While we can debate when the next rate cut is coming, the fact is that central banks globally are moving towards an easing cycle. Equity investors are usually on the optimistic side and are looking for an excuse to buy," said Mohit Kumar, chief European economist for Jefferies.

Goldman Sachs raised its 2024 year-end target for the STOXX 600 to 540 from 510, citing a possible improvement in economic growth and monetary policy easing across central banks. The latest target implies a nearly 6% upside from Friday's close of 509.64.

The benchmark index is set for a 6.5% quarterly gain, following similar gains in the final quarter of 2023, as investors bet on easing monetary policy across global economies.

Among big movers, shares of Direct Line fell 11.3% after Belgian insurer Ageas said it did not intend to make a further offer for the British home and motor insurer after it turned down two previous proposals.

Swedish real estate group SBB jumped 10.4% after it said it would buy back debt at a discount of 60% compared with the debt's original value, in an attempt to calm investor nerves as it scrambles to tackle a multi-billion debt pile.

Dassault Aviation gained 7.3% to reach an all-time high after brokerage Exane BNP Paribas ugraded the Rafale fighter jet maker to "outperform" from "neutral".

Germany's Hensoldt, Italy's Leonardo and France's Thales added between 1.9% and 10% as investors snapped up defence stocks after the concert hall attack in Moscow on Friday.

Striking a cautious tone, leading German economic institutes have cut their joint forecast for growth in Europe's biggest economy this year, to 0.1% from a previous 1.3%.

European markets will be closed on Friday and Monday for Easter holidays. (Reporting by Sruthi Shankar and Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta, Shinjini Ganguli and Barbara Lewis)