Stocks in Spain slid on Wednesday as investors digested the news that Prime Minister Pedro Sanchez' Spanish Socialist Workers' Party (PSOE) reached an agreement to form a coalition government with far-left Podemos after no party managed to secure a majority in Sunday's general election.

The IBEX 35 dropped 1.38% at 10:29 am CET with the banking sector leading the losses. Bankia was the worst performer as its stock plunged 4.25% at 10:30 am CET, followed by Bankinter, down 4.03%, Banco de Sabadell, sliding 3.81%, and Banco Santander, losing 3.23%, at the same time.