Spain’s benchmark stock index extended losses on Friday after the region of Catalonia declared independence from Spain, unleashing deep uncertainty over the future of the country’s wealthy region.

Seventy Catalan deputies voted for independence, with 10 opposed and two blank ballot slips.

Spain’s IBEX 35, the index of the country’s largest publicly listed companies, kicked off Friday’s session marginally lower and extended losses to trade almost 2 per cent down on the day after the news broke. It later closed down around 1.5 per cent.

The euro showed only a muted reaction.

The vote was deeply disputed and is likely to be declared illegal by Spain’s constitutional court, but in the immediate future it introduces immense uncertainty which is leading investors to distance themselves from Spanish assets.

Ahead of the vote, Chris Iggo, chief investment officer for fixed income at AXA Investment Managers, said that independence for Catalonia would be “very disruptive to economic growth”.

Neil Wilson, a senior market analyst at ETX Capital, said that there was no reason for outright panic just yet but that “an escalation in tensions now looks likely as Spain faces its biggest crisis in decades”.

He said that there’s a clear risk of social unrest and, from an economic standpoint, there are implications for the Catalan economy if consumers begin to rein in spending.

“This could hit demand and we have already seen Spain dial down its expectations for growth this year as a result of the crisis. With both sides leaning towards extremes, things could get rockier for investors.”