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

European stock markets and shares in French banks fell Tuesday as investors fretted over fresh political turmoil in France.

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 asset