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* Swiss National Bank surprises with 25 bps interest rate cut

* PZU FY profit hits record high on banking, insurance growth

* Euro zone business activity close to stabilising in March

March 21 (Reuters) - European shares scaled record-high levels on Thursday, boosted by basic resources-linked stocks and a strong risk appetite, ahead of a day packed with central bank decisions.

The pan-European STOXX 600 index was up 0.7% as of 0906 GMT, having hit a record high of 510.07 points in opening minutes of trade.

Basic resources index led sectoral gains with a 2.7% jump, as prices of most metals climbed after the Federal Reserve maintained its projection of three rate cuts for this year, while gold soared to record highs.

Technology and rate-sensitive real estate shares advanced 2.2% and 2.4% respectively, as risk appetite ramped up following Fed's rate-cut outlook.

"The catalyst for risk sentiment is really just the Fed suggesting it has greater tolerance for higher price pressures and despite the upside surprises in recent data, they are still on this path for easing," said Laura Cooper, senior macro investment strategist for iShares EMEA at BlackRock.

On the data front, French business activity shrank for a tenth consecutive month in March, while Germany's economic downturn eased slightly as business activity in the country’s service sector came close to stabilising.

Business activity in the overall euro zone rose to 49.9 this month from February's 49.2, within a whisker of returning to growth, as inflationary pressures bucked a recent trend and eased.

All eyes will now be on March business activity data for the United States, due later in the day, which could offer potential clues into the interest rate cut cycle.

Meanwhile, in a surprising turn of events, the Swiss National Bank cut its main interest rate by 25 basis points to 1.50%, making it the first major central bank to dial back tighter monetary policy aimed at tackling inflation.

The main Swiss Market Index rose after the decision and was last up 0.9%.

Later in the day, the Bank of England looks set to keep its interest rates on hold, as it awaits clearer signs that the country's hot inflation problem has been doused.

In corporate updates, Next kept its guidance for sales and profit in the current year after reporting a slightly better than expected rise in profit for 2023-24. The clothing retailer rose 4.8% while the broader retail index was up 1.7%.

Shares in PZU moved 5.5% higher after the Polish insurer's net profit hit a record high last year, on higher banking segment earnings and insurance profitability. (Reporting by Khushi Singh in Bengaluru; Editing by Sherry Jacob-Phillips and Varun H K)