Portugal Colonial - French political turmoil sends European stocks down, Wall Street edges up

The Paris stock market tumbled and French borrowing costs rose over fears that France's minority government could be toppled, after Prime Minister Francois Bayrou proposed a confidence vote to break an impasse over his proposed budget cuts.

"Delaying or ditching (fiscal) reforms will make the debt situation more untenable and weigh on the economy," said Neil Wilson, UK investor strategist at Saxo Markets.

Shares in French banks sank, with BNP Paribas down around four percent while rival Societe Generale shed more than six percent -- both major lenders that hold French government debt.

"The question now is whether this develops into a broader drag on European assets or remains a distinctly French affair," said Fawad Razaqzada, market analyst at StoneX.

Paris, London and Frankfurt all closed lower, following losses in Asia.

Wall Street's main indexes advanced as investors tried to look past US President Donald Trump's move to oust Federal Reserve governor Lisa Cook.

The US leader cited allegations of false statements on her mortgage agreements, but Cook said Trump had no authority or legal cause to fire her, while her lawyer announced a planned legal challenge on Tuesday.

The unusual step adds to fears about the independence of the central bank, fueled by Trump's repeated public demands to Fed chairman Jerome Powell to lower interest rates.

Powell suggested on Friday more cuts to US interest rates were on the horizon.

"Investors are becoming increasingly concerned by the president's persistent interference in the business of the central bank," said David Morrison, senior market analyst at Trade Nation.

Stock markets crept up and US Treasury bond yields, closely watched as a proxy for interest rates, were little changed.

"One explanation could be that there's a strong belief that this will fail in the courts because (Cook) has not been proven guilty of anything at the moment," Steve Sosnick of Interactive Brokers said.

Markets also were not swayed by a survey released on Tuesday that showed a fall in consumer confidence and a persistent worry over Trump's tariffs -- which the president threatened to expand on Monday to countries with measures "designed to harm" US technology.

The dollar fell while gold rose as investors sought a safe place to store their gains.

Wall Street remains focused on results due Wednesday from AI chip giant Nvidia, a bellwether for the artificial intelligence sector.

Investors are also awaiting a US economic growth update on Thursday and a key inflation gauge Friday for clues on how far interest rates might fall -- or not -- in the coming months.

Oil prices slid Tuesday following recent increases as traders track a possible peace deal to end the war between Ukraine and key crude producer Russia.

- Key figures at around 2015 GMT -

New York - Dow: UP 0.3 percent at 45,418.07 points (close)

New York - S&P: UP 0.4 percent at 6,465.94 (close)

New York - Nasdaq: UP 0.4 percent at 21,544.27 (close)

Paris - CAC 40: DOWN 1.7 percent at 7,709.81 (close)

London - FTSE 100: DOWN 0.6 percent at 9,265.80 (close)

Frankfurt - DAX: DOWN 0.5 percent at 24,152.87 (close)

Tokyo - Nikkei 225: DOWN 1.0 percent at 42,394.40 (close)

Hong Kong - Hang Seng Index: DOWN 1.2 percent at 25,524.92 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,868.38 (close)

Euro/dollar: UP at $1.1637 from $1.1624 on Monday

Pound/dollar: UP at $1.3475 from $1.3460

Dollar/yen: DOWN at 147.45 yen from 147.70 yen

Euro/pound: UP at 86.36 pence from 86.35 pence

West Texas Intermediate: DOWN 2.4 percent at $63.25 per barrel

Brent North Sea Crude: DOWN 2.3 percent at $67.22 per barrel

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L.Henrique--PC