European stocks rally pauses ahead of Fed outcome

European banks index inched up 0.2% after a 5% jump in the past two sessions when UBS's state-backed takeover of the 167-year-old Credit Suisse and coordinated actions by central banks to boost liquidity lifted sentiment. The Fed is expected to raise interest rates by a quarter-of-a-percentage point later in the day, a decision that will land amid a brewing political storm over the U.S. central bank's oversight of collapsed Silicon Valley Bank.

A two-day bounce in European stocks petered out on Wednesday as investors awaited the Federal Reserve's policy outcome after signs of troubles in the banking sector raised hopes of a tempered approach to further U.S. interest rate hikes.

By 0811 GMT, the pan-European STOXX 600 index posted marginal gains after a two-day bounce, fuelled by a rally in battered banking stocks following a series of support measures to stabilise the sector. European banks index inched up 0.2% after a 5% jump in the past two sessions when UBS's state-backed takeover of the 167-year-old Credit Suisse and coordinated actions by central banks to boost liquidity lifted sentiment.

The Fed is expected to raise interest rates by a quarter-of-a-percentage point later in the day, a decision that will land amid a brewing political storm over the U.S. central bank's oversight of collapsed Silicon Valley Bank. Ubisoft jumped 4.7% after HSBC upgraded the French video game producer's stock to "buy" from "hold".

 

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