Madrid bank shares fall on political fears after elections signal instability

Spanish stocks dropped after elections on Sunday left no clear winner, signalling weeks of political instability ahead.

Lenders and utilities contributed the most to the decline in the Madrid stock market index — the IBEX 35 — which fell 1.9% at one stage yesterday.

Banco Santander, Banco Bilbao Vizcaya Argentaria and CaixaBank fell more than 2.4%, while Iberdrola, the nation’s largest utility owner, declined 1.9% on speculation those industries would be among the most hurt if a new government modifies policies.