Investing.com -- Yields on Spanish government bonds rose and the premium over the benchmark German bond widened after acting Prime Minister Pedro Sanchez invited the populist left-wing Unidos Podemos party to form a coalition government. It's the first time that Podemos, which has loudly dissented against the euro zone's fiscal policy in the past, would be represented in government at the national level.
The yield on the benchmark Spanish 10-year government bond hit a four-month high of 0.45% after the news
The spread over the analogous German Bund hit a one-month high of 67.5 basis points
The IBEX 35 benchmark stock index fell to 9,362 points from 9,415 immediately before the news, making it the worst-performing stock market in Europe on Tuesday.