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CAC 40 Up 68 Points On Hopes Of Stimulus

French stocks rallied on Wednesday to extend gains from the previous session amid hopes that Japan and Europe will unveil large stimulus packages to minimize the economic fallout due to the coronavirus pandemic.

The Japanese government is likely to inject a fresh stimulus package worth $1.1 trillion on top of a $1.1 trillion package already rolled out by the government last month.

The European Commission is due to present its proposal for a bailout package, potentially backing efforts by France and Germany for a 500 billion-euro ($547 billion) fund to aid recovery efforts.

European Central Bank President Christine Lagarde said on a question and answer session today that the euro zone economy is likely to shrink between 8 percent and 12 percent this year.

The benchmark CAC 40 jumped 68 points, or 1.48 percent, to 4,673 after rallying 1.5 percent the previous day.

Banks led the surge, with BNP Paribas, Credit Agricole and Societe Generale climbing 6-9 percent.

Automaker Renault soared 14 percent and Peugeot added 7 percent.

Drug maker Sanofi slid half a percent on news it plans to sell its equity investment in Regeneron through a registered public offering and related share repurchase by Regeneron.

Building-materials maker Cie. de Saint-Gobain SA gained 0.7 percent after it sold a near 11 percent stake worth 2.56 billion Swiss francs in Sika AG.

In economic releases, French consumer confidence weakened to a 16-month low in May as households were concerned about general economic conditions amid coronavirus pandemic, survey results from the statistical office Insee showed. The corresponding index fell to 93 in May from 95 in April.

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