The markets continued to punish Spain on Thursday with a volatile session that saw the country’s risk premium rise to more than 400 basis points for the first time since November.

Investors’ doubts over whether Spain will meet its deficit-reduction obligations and whether Prime Minister Mariano Rajoy’s reforms will put the economy back on track were also reflected in the Ibex 35, which dipped by more than 1.5 percent before closing at 7,660.50 points — its lowest level since March 2009.

Economy Minister Luis de Guindos blamed the volatility on “nervousness” on the part of investors and “doubts about growth in Europe.”

“If there is no economic growth, the markets begin to cast doubts,” he told Efe news agency from Marbella. Nevertheless, the economy chief insisted that Rajoy’s reforms are “going to become the major source for winning back confidence.”

Different reports issued by Citigroup and Standard & Poor’s, however, put question marks next to the country’s economic recovery and suggest the possibility that Spain will need a financial bailout from the European Union.

Still, there was a bit of support coming from the International Monetary Fund on Thursday over Rajoy’s 27.3-billion euro budget reduction plans.

Speaking in Washington, Gerry Rice, director of the IMF’s external relations department, said while the world-lending body was still assessing Spain’s budget — details of which were released earlier this week — it recognized that the government has adopted “vigorous and broad” policies.

Rice stressed that Spain must bring down its deficit from 8.5 percent of GDP to 5.3 percent by the end of the year, as it has promised the European Union.

“We will point to the need to ensure compliance with the new target, not just at the central level [but] also at the regional government level,” Rice told a regular briefing for reporters. “Clearly the challenges Spain is facing are severe [and] market sentiment remains volatile.”

Reaching a new high since November, Spain’s risk premium hit 409 basis points over the benchmark German bund before closing at 402 points.

The blue-chip Ibex 35 closed at 7,660.50 points, just two decimal points lower than at Wednesday’s close. Among the worst performers on the Spanish bourse, according to analysts, were firms and companies that will be directly affected by the budget cuts such as banks, builders and utilities.

Endesa fell 1.59 percent, Caixabank dropped 1.57 percent, and ACS and Abengoa, both lost 1.51 percent.

Gamesa made the best showing of the day, with a 2.88-percent rise.