The flagship CAC 40 index gained 18.21 points to 7,131.12 points. The day before, it had recovered 1.44% after a gain of 1.27% on Monday.

The Federal Reserve (Fed) is due to publish its decision at 19:00 (18:00 GMT), then its chairman Jerome Powell will hold a press conference at 19:30 (18:30 GMT).

The majority of analysts believe that the institution should raise its key rates by 0.25 percentage points, to bring them just below 5%, as at the last meeting.

Earlier in March, they thought the rise would be double, before the failure of regional U.S. banks caused panic.

"The Fed must reassure the markets that banks are not fragile," said Alexandre Neuvy, manager of Amplegest.

"If it does not raise rates, it sends a negative message about the soundness of the banks and if it decides on a 50 basis point increase, it sends a negative message also because the banks were already suffering from the rate hike" and a new turn of the screw would not help, he said.

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 after posting a slight increase for most of the session.

Unstable foundations in real estate

The real estate sector was the most penalized Wednesday ahead of the Fed's announcements. A note from Morgan Stanley estimates that the share prices 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," say analysts, who expect "a significant reduction in the availability of capital (...) and more attention to the quality of banks' assets."

URW fell 7.50% to 49.48 euros, Klepierre 6.01% to 21.74 euros, Covivio 4.62% to 53.65 euros, Mercialys 3.94% to 9.88 euros and Gecina 3.85% to 94.90 euros.

Wendel weighs on Bureau Veritas

Bureau Veritas' largest shareholder, investment company Wendel, has launched an issue of bonds exchangeable into Bureau Veritas shares for a nominal amount of approximately €750 million. If successful, its stake will increase from 35.5% to 30.6%.

The share of the French inspection and certification group fell 2.40% to 26.08 euros. Wendel ended stable at 98.60 euros.

© 2023 AFP