Shock plunge in Italian bank shares after rumour

Italian bank shares plummeted suddenly on the Milan stock exchange on Friday, with the country's biggest bank UniCredit down more than eight percent before recovering to show a loss of three percent. Banca Popolare di Milano was down 4.83 percent, Intesa Sanpaolo 3.53 percent and Banca Monte dei Paschi di Siena 2.65 percent at around 1100 GMT amid a market rumour that Italy's sovereign credit rating is to be downgraded. The benchmark FTSE Mib index was down 0.52 percent at 1130 GMT, while other European bourses were in positive territory. The falls came after Moody's ratings agency on Thursday warned it could downgrade 16 Italian banks but bank shares were up at the start of trading. Along with Standard and Poor's, Moody's has also warned it could downgrade Italy's sovereign rating because of the country's current economic woes.