MADRID (Reuters) - Spain's acting prime minister Mariano Rajoy has survived two inconclusive elections in seven months but his party's parliamentary majority has not.

As the house gathered to nominate a new speaker, the Popular Party is still the largest.

But without a cross-party agreement, little progress appears possible.

Especially as the opposition Socialists are still holding out - and refusing to endorse a Rajoy-led government.

"This political mix where no party really comes ahead is probably something we're going to see for the next re-election as well and Spain's going to stuck here without any real political direction" said CMC markets analyst Jasper Lawler.

There was one boost for Rajoy.

Public works minister Ana Pastor of the People's Party was nominated as parliamentary speaker.

Rajoy's government has enjoyed support from investors for his reform programmes.

And though crippling high unemployment still blights its recovery, growth this year is seen coming in at 2.7 per cent or above.

Fears that Spain's political deadlock could result in an economic logjam could, say some analysts, be overdone.

"Uncertainty is a bad thing ... The other line of thought is that without a government meddling too much, maybe the market forces are able to take over, the people in Spain given a bit more confidence to go out there and act in their own economic best interests, and that eventually Spain can just muddle forward" said Lawler.

Rajoy could face a first vote of confidence on any new proposals next month - if he can get the backing he needs beforehand.