(Bloomberg) -- European stocks gained for a fourth straight day as investors weighed progress on a potential ceasefire in Ukraine. Their focus will turn to the Federal Reserve’s interest-rate decision later today.

The Stoxx Europe 600 Index rose 0.2% by the close. Energy and retail stocks outperformed, while chemicals and telecoms were the biggest laggards. Swiss watchmaker Swatch Group AG advanced 1.5% after its chief executive officer said he hopes the firm will be taken private.

Shares in some leading European defense companies declined, pulling back after a sharp rally stoked by plans to boost military spending across the continent. Danske Bank double-downgraded Sweden’s Saab AB on valuation worries, adding to the concerns.

Investors are monitoring attempts to secure a truce in Ukraine, as US President Donald Trump said his efforts to end Russia’s war are “on track” after having a “very good” call Wednesday with Ukranian President Volodymyr Zelenskiy.

Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management in Frankfurt, said more European engagement in peace talks was necessary for a boost to markets.

“Companies will only be willing to put money on the table once there is the prospect of a stable, long-lasting peace,” Kemper said. “Only in such a scenario would we see an uptick of growth expectations.”

The Stoxx 600 is on track to beat the S&P 500 by about 19 percentage points in dollar terms in the first quarter — its biggest outperformance on record, boosted by an improving economic and political outlook. German lawmakers on Tuesday agreed to hundreds of billions of debt-financed defense and infrastructure spending.

Elsewhere in Europe, political upheaval in Turkey sent the lira tumbling, while an equity selloff triggered a trading halt on the Istanbul exchange. Attention later Wednesday will be on the Fed, with officials likely to hold interest rates steady.

In other individual stocks, Tesco Plc dropped 1.5% to the lowest since August, amid concerns over a potential escalation of supermarket price competition. GSK Plc fell 1.7% as the Wall Street Journal reported the US Department of Health and Human Services was considering a cut to federal government HIV funding.

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--With assistance from Sagarika Jaisinghani and Paul Jarvis.