Indian shares ended lower on Tuesday, led by losses in heavyweight financials and auto stocks, with volatility rising to a 15-month high amid the ongoing national elections.
The blue-chip Nifty 50 was down 0.62% at 22,302.50 points, while the S&P BSE Sensex shed 0.52% to 73,511.85.
The Nifty Volatility Index, a gauge for domestic market volatility, rose for the ninth consecutive session to close at 17.01, a 15-month high.
Volatility in India will continue to be elevated as uncertainty over election results will make sections of investors hold back or even take some money off the table, said Raghvendra Nath, managing director at LadderUp Wealth Management.
The world's most populous nation began voting last month, with votes set to be counted on June 4.
On Tuesday, eleven out of the 13 major sectoral indexes declined, with heavyweight financials and auto stocks closing down 0.92% and 1.83%, respectively.
The Nifty PSU index, which comprises of state-run banks, also ended 2.31% lower, with analysts saying that lenders' margins are at higher risk from the Reserve Bank of India's proposed guidelines regarding project finance.
The index extended declines for the fourth straight session and has lost about 6% since the guidelines were announced on Friday.
In contrast, consumer stocks rose 2.02% on upbeat corporate earnings. Consumer goods maker Marico closed 10% higher in its best session in about 15 years, after forecasting revenue growth outpacing volumes in fiscal year 2025.
Godrej Consumer Products also posted its best day in three months, after reporting a jump in its fourth-quarter adjusted profit.
U.S. rate-sensitive IT stocks rose 0.77% on renewed U.S. rate cut bets, with heavyweight TCS, Infosys, Wipro and Tech Mahindra up between 1% and 2.5%.
The broader, more-domestically focussed small- and mid-caps dropped about 2% each, underperforming the benchmarks and logging their worst session since March 13.
