The Spanish national elections have caused turbulence in their financial markets, after surprising results left no clear winner.

The conservative People’s Party and the Socialists, who have dominated politics for the last couple of decades, were challenged by anti-austerity newcomers Podemos. Whilst it is likely that the People’s Party leader Mariano Rajoy will be asked to form a government after winning 29 percent, his weaker majority will make for a more difficult task than previous years.

Spanish markets reacted uncertainly to the news, with Madrid’s Ibex 35 down 2.8 percent. in early trading, with Spanish banks falling around 4 percent. The yield on ten-year Spanish government bonds rose 0.135 of a percentage point to 1.825%, meaning Spain would have to pay more to borrow internationally.

It seems the Spanish people have chosen to abandon the traditional two-party system in favour of alternative emerging parties, after an economic crisis that lifted unemployment rates and triggered harsh austerity measures.

“Spain is not going to be the same anymore and we are very happy,” said Podemos leader Pablo Iglesias after the results were released.

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