Despite garnering the most votes, Rajoy`s People`s Party (PP) got its worst result ever in a general election, polls showed, as Spaniards hurt by a grinding recession and yet to feel an economic recovery turned away in droves from the party.
Newcomers anti-austerity Podemos and liberal Ciudadanos made big gains, coming third and fourth respectively, ending a decades-long two-party political system and ushering in a new and potentially volatile era of compromise politics.
That points to a stalemate, probably disrupting an economic reform program that has helped pull Spain - the fifth-largest economy in the European Union - out of recession and dented a still sky-high unemployment rate.
"This result confirms Spain has entered an era of political fragmentation," said Teneo Intelligence analysts Antonio Barroso. "It`s clear that parties will have to negotiate and forming a government could be pretty complicated."
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