FRANKFURT/PARIS (dpa-AFX) - Ahead of a speech by U.S. Federal Reserve Chairman Jerome Powell, interest rate-sensitive real estate stocks remained under pressure across Europe on Wednesday. Their sub-index, at the bottom of the market-wide Stoxx Europe 600, lost almost two percent, falling to its lowest level since the end of March. The sector barometer is also one of the biggest losers so far this year, down by a good eleven percent.

In the Dax, Vonovia lost 2.2 percent, and investors in the MDax and SDax also gave real estate stocks such as LEG, Aroundtown and Grand City Properties a wide berth. They were among the biggest losers in their indices.

In the afternoon, Powell makes his semi-annual appearance before the U.S. House of Representatives. A week ago, the Federal Reserve had taken a pause on interest rates, but at the same time held out the prospect of two more rate hikes. The markets had been surprised by the determination of the monetary guardians, who have been fighting high inflation for more than a year. Now investors were waiting for further indications of how likely such a tight approach really was, wrote experts at Commerzbank.

British inflation data for May also contributed to the negative mood for the sector. Inflation remained at the level of the previous month, whereas analysts had expected a decline. Core inflation, which excludes the volatile prices of energy, food and beverages, actually rose, reaching its highest level in 31 years./gl/tih