European Shares Tumble Amid Political Uncertainty in France

European shares experienced a downturn on Tuesday, particularly driven by losses in France where political uncertainties intensified. France's CAC 40 index saw a 1.4% decline as fears rose over the stability of the country's minority government, which faces potential ousting next month.

Despite the economic backdrop, Prime Minister Francois Bayrou is encountering resistance over budget cut plans, as three major opposition parties announced they would oppose a confidence motion scheduled for September 8. This has led to pronounced stock falls in French banks such as BNP Paribas and Societe Generale by 6.2% and 5.2%, respectively.

On a broader level, the European STOXX 600 index fell 0.7% early in the trading day, influenced by simmering concerns from across the Atlantic. U.S. President Donald Trump's dismissal of Federal Reserve Governor Lisa Cook due to alleged impropriety in mortgage borrowing has unnerved investors, questioning the central bank's stability. Cook, through attorney Abbe Lowell, contested the legality of her firing, arguing no justifiable cause was present. This incident, coupled with a dovish stance from U.S. Federal Reserve Chair Jerome Powell, had previously bolstered the European index close to record highs.

(With inputs from agencies.)