Italian prosecutors are investigating two leading credit rating agencies after consumer groups complained about turbulence on financial markets, officials said Thursday.

Recent reports and rating decisions issued by Moody's and Standard & Poors were tantamount to "failing" Italy even before the government could complete austerity moves meant to boost the nation's reputation in the markets "and while the markets were open," prosecutor Carlo Maria Capristo told Italian broadcaster Sky TG24 TV.

Investigators seized documents in offices of both firms, prosecutors said during a televised news conference.

The probe began months ago, spurred by contentions from Italian consumer groups that unjustifiably pessimistic rating reports were causing Italian stocks to tank. Prosecutors must begin a probe after such complaints.

The two agencies had issued warnings of possible downgrades amid fears that the eurozone's third-largest economy could be caught up in the European debt crisis.

Instead, a third agency, Fitch Ratings, said last month that Italy's package of austerity measures, approved by Parliament in July, would help stabilize the government's finances and its credit rating.

Three analysts from S&P and one from Moody's are under investigation, Italian news agency ANSA reported.

The ratings agencies "have lost all credibility," Elio Lannutti, head of the Adusbef consumer group told Sky TV at the news conference.

Moody's said in a statement it is cooperating with authorities. "Moody's takes its responsibilities surrounding the dissemination of market sensitive information very seriously," it added.

Standard & Poors said the accusations were unfounded.

"S&P considers the allegations being investigated are without any merit. We will vigorously defend our actions, our reputation and that of our analysts," said a statement from the ratings agency.

Calls to offices of Trani prosecutors and police went unanswered Thursday evening.

The Italian stock market watchdog, Consob, declined to comment on the investigation.

Thursday saw strong turbulence on Italy's main stock exchange in Milan, where the FTSE MIB benchmark index ended down 5.16 percent amid fears that the eurozone's debt crisis might eventually spread to Italy.

Trading had begun with a rise, of 1.2 percent, a day after Premier Silvio Berlusconi _ in a much awaited speech to lawmakers _ proclaimed Italy's economic foundations "solid." He also maintained that the recently approved austerity measures were sufficient to help rein in public debt.