The star CAC 40 index gained 18.21 points to 7,131.12 points. The day before, it had recovered 1.44% following a gain of 1.27% on Monday.
The Federal Reserve (Fed) is due to release its decision at 7:00 p.m. (6:00 p.m. GMT), then its chairman Jerome Powell will hold a press conference at 7:30 p.m. (6:30 p.m. GMT).
The majority of analysts believe that the institution should raise its key rates by 0.25 percentage points, to bring them to just below 5%, as at the last meeting.
Earlier in March, they thought the rise was going to be double, before the failure of regional US banks caused panic.
“The Fed must reassure the markets that the banks are not fragile,” comments Alexandre Neuvy, manager of Amplegest.
“If it does not raise its rates, it sends a negative message regarding the soundness of the banks and if it decides on a 50 basis point increase, it sends a negative message too because the banks were already suffering from the increase in rates “and a new turn of the screw would not help, he explains.
As for European banks, Société Générale (-1.03% to 21.71 euros), BNP Paribas (-0.49% to 54.47 euros) and Crédit Agricole (-0.19% to 10.26 euros) ended lower following posting a slight rise for most of the session.
Shaky foundations in real estate
The real estate sector was the most penalized on Wednesday ahead of the Fed’s announcements. A note from Morgan Stanley Bank estimates that the share price of most European companies in the sector will fall in the face of high interest rates.
The revenues of real estate companies “are under pressure in the face of an inevitable increase in the cost of debt”, underline the analysts, who expect “a significant reduction in the availability of capital (…) and more attention to the quality of banks’ assets”.
URW fell by 7.50% to 49.48 euros, Klepierre by 6.01% to 21.74 euros, Covivio by 4.62% to 53.65 euros, Mercialys by 3.94% to 9.88 euros and Gecina by 3.85% to 94.90 euros.
Wendel weighs in on Bureau Veritas
Bureau Veritas’ main shareholder, the investment company Wendel, launched an issue of bonds exchangeable for Bureau Veritas shares for a nominal amount of around €750 million. If successful, its stake will drop from 35.5% to 30.6%.
The action of the French inspection and certification group fell 2.40% to 26.08 euros. Wendel ended stable at 98.60 euros.
