Spain's governing Socialists won the country's third election in four years on Monday, but have fallen short of a majority.
PM Pedro Sánchez's party polled 29 per cent and will need the help of either left-wing Podemos and regional parties, or the centre right, to form a government.
For the first time since military rule ended in the 1970s, a far-right party, Vox, is set to enter parliament.
Vox opposes multiculturalism, unrestricted migration, and what it calls "radical feminism", reports BBC.
Analysts say support for Vox has been boosted by widespread anger at the Catalan independence drive. The party fervently opposes any concessions to the secessionists.
The other big story of the election was the collapse in support for the conservative Popular Party (PP), which governed Spain until it was dumped from power in May 2018 in a no-confidence vote.
In its worst election ever, the PP won just 66 seats, down from 137 in the previous parliament.
Turnout was 75.8 per cent, the biggest for several years and 9.0 per cent higher than the previous election in 2016.
In his victory speech, Mr Sánchez said the party's big challenges were to fight inequality, advance co-existence and halt corruption.
"The future has won and the past has lost," he told cheering supporters. During his time in office he has raised the minimum wage, appointed a female-dominated cabinet and promised to bring in laws defining rape as sex without clear consent.