Indian shares closed more than 1 percent lower on Wednesday, as signs that the US presidential race was tightening rattled global investor sentiment, sending Asian shares to seven-week lows and weakening the dollar. The BSE index ended 1.25 percent lower at 27,527.22.
The broader NSE index was down 1.3 percent at 8,514, its lowest close in over three months. Financial and energy stocks led the losses on both the indexes, with Yes Bank, Bank of Baroda, Bharat Petroleum Corp and Oil and Natural Gas Corp among the top percentage losers.
NSE's volatility index, or the fear gauge, rose as much as 8.39 percent to its highest in about a month.
In Asia, markets were beginning to rethink their long-held bets of a victory for Democratic candidate Hillary Clinton amid signs her Republican rival Donald Trump could be closing the gap, forcing money out of riskier assets and into safe-havens such as the Japanese yen and gold.
"Weak global markets and concerns over the US elections, which is impacting global markets, have also affected our markets this morning. There aren't any major domestic negatives today," said Dipen Shah, senior vice president, PCG Research at Kotak Securities.
Software exporters Tata Consultancy Services fell as much as 1.7 percent, Wipro lost as much as 1.81 percent while Infosys was lower by as much as 0.94 percent.
The Nifty IT index dropped more than 1 percent to its lowest in more than two years.