Days or weeks of negotiations may be needed to determine who will govern Spain, with the new far left Podemos and business-friendly Ciudadanos parties producing shockwaves because of strong support from voters weary of the country's political status quo.
In past elections, Popular Party and the main opposition Socialists were the established powerhouses and only needed support from tiny Spanish parties to get a majority in parliament when they didn't win one from voters.
With 81 percent of the vote counted, the Popular Party was heading toward winning 122 seats in the 350-member lower house of Parliament -- far below the 186 majority it now holds.
The opposition Socialist Party was on track to win 92 seats, while Podemos and allies were heading toward winning 69 and Ciudadanos set to get 38.
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Exit polls also showed similar outcomes that analysts said could make it extremely difficult for the Popular Party to form a government because it wouldn't get a majority of seats in parliament by allying with Ciudadanos, its most natural partner.
"If the current poll predictions are confirmed, then it looks like a Socialist government," said Federico Santi, a London-based analyst with the Eurasia Group political risk consultancy.
"Reaching a deal between the Socialists, Ciudadanos and Podemos is not going to be straightforward ... But if the alternative is leaving the country without a government, the pressure will be on the parties."
Podemos and Ciudadanos both gained strength by portraying the Popular Party and the Socialists as out-of-touch behemoths run by politicians who care more about maintaining their own power than citizens' needs.