Madrid share prices plunged 2.58% to a nine-year closing low today as the government tried to contain investor fears about a banking and sovereign debt crisis.
The IBEX-35 index of leading shares tumbled 161 points to 6,090, the lowest finish since April 1, 1993.
Among the hardest hit stocks, construction group Sacyr Vallehermoso plummeted 11.18%, stricken lender Bankia slumped 8.6%, and technology group Abengoa slid 5.37%.
The interest rate on Spain's 10-year bonds shot to a high of 6.7% - unsustainable over the longer term - as the nation fought to avoid being the next victim of the eurozone crisis.
When compared to safe German debt, investors in Spanish bonds demanded an additional 5.39 percentage points, a premium that easily crashed through euro-era records set each day of this week.