By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- New, tougher sanctions on Russia weighed on European stock markets on Wednesday as investors analyzed the potential consequences of the measures. Spanish stocks, however, stood out as outperformers after better-than-expected growth data for the country.

Sanction details: Both the U.S. and the European Union agreed to expand sanctions on Russia late Tuesday, with the new restrictions targeting the Russian energy, defense, and finance sectors. In the financial sector, the EU is now curbing access to financing for state-owned banks in Russia, while it will stop exporting specific goods and technologies to the country to make it more difficult to develop oil resources over the longer term.

The U.S. Treasury also said it will ban American citizens from buying new stocks or bonds from three major Russian financial institutions, limiting their access to U.S. capital markets. The three banks are Bank of Moscow , Russian Agricultural Bank, and VTB Bank .

Data: Spain surprised with some better-than-expected second-quarter economic growth data on Wednesday. The economy expanded by 0.6% in three-month period, exceeding an estimate released last week by the country's central bank and marking the strongest growth rate in six years.

Meanwhile, another data release showed Spanish consumer prices dropped in July for a second month in a row, stoking fears of a sustained period of deflation.

In France, consumer confidence stagnated in July, staying well below the long-term average.

Market reactions: Most country-specific indexes were mired in the red and the Stoxx Europe 600 index fell 0.1% to 342.08. France's CAC 40 index lost 0.1% to 4,363.57, and Germany's DAX 30 index was slightly lower at 9,650.14. The U.K.'s FTSE 100 index was marginally higher at 6,809.73, supported by Barclays PLC after the bank posted upbeat earnings.

Spain's IBEX 35 index climbed 0.5% to 10,950.90 on the back of the encouraging growth data.

Russia's MICEX index rallied 2.3% to 1,400.75, shrugging off the new sanctions. Naeem Aslam, chief market analyst at AvaTrade, explained that the European leaders made a clever choice in their measures by leaving out the gas sector, which helped push up the Russian index.

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