Italian shares traded in the United States fell sharply on Friday after deep declines among Italy's largest banks sparked fears of debt contagion in the euro zone, signalling more weakness for European financials. US-listed shares of Italian energy company Eni dropped 3.3 percent, while Telecom Italia's US shares slid 2.4 percent and Milan-based retailer Luxottica Group's shares lost 2.3 percent.
Risk premium on Italian debt reached its highest level since the launch of the euro on Friday after shares in Italian bank UniCredit were briefly suspended in Milan due to excessive losses. UniCredit shares finished down 7.9 percent. The BNY Mellon index of leading American Depository Receipts fell 1.0 percent while the US benchmark S&P 500 index was down 0.7 percent.
Worries in Italy set off sharp declines among European financials trading in the United States. US-listed shares of Spain's Banco Santander declined 4.4 percent, LLoyds Banking Group shares fell 3.3 percent and Barclays Bshares dropped 2.4 percent. Europe's bank stocks have been under pressure in recent days since Moody's Investors Service downgraded Portugal's debt four notches to "junk" on Tuesday.
The BNY Mellon index of leading European ADRs was down 1.4 percent. In Europe, the FTSEurofirst 300 index of top shares ended down 0.8 percent. Exchange-traded funds (ETFs) tracking European stocks also mirrored the declines. Italy's iShares MSCI Index Fund fell 3.8 percent and Spain's iShares MSCI Index Fund declined 3.4 percent. The iShares MSCI EMU Index, tracking stocks in the European Monetary Union, was down 2.5 percent. Weak US jobs data added to a bearish global market sentiment after the US Labour Department said on Friday.
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