Mayhem returns to the Spanish markets

The Spanish stock market suffered its worst session for the year on Friday as Spain’s risk premium jumped once more, making a mockery of the government’s attempts to stem the tide of investor mistrust.

The main detonator for the renewed sell-off of stocks and bonds was the release of figures showing Spain’s banks had borrowed a massive 316.343 billion euros from the European Central Bank last month, highlighting the extent to which they have become pariahs in the wholesale market.

The yield on the benchmark 10-year government bond at one point rose above six percent, with the spread with the German equivalent climbing 21 basis points to 424 basis points.

The blue-chip Ibex 35 closed down 3.58 percent at 7,250.60 points, its lowest level since March 2009. Since the start of the year, it has shed 15.3 percent, making it the worst performer in Europe.