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Indian shares swung to losses on Wednesday as the market registered its slowest trading day on record, ahead of the release of the Reserve Bank of India's (RBI) latest policy meeting minutes and key U.S. macroeconomic data.

The Nifty 50 index closed 1.01% lower at 18,199.10 and the S&P BSE Sensex fell 1.03% to 61,067.24. Both benchmarks had risen nearly 0.5% during the session.

Trading volume on the Nifty 50 was at 187,594,000, when markets closed, the lowest ever on record, according to Refinitiv data.

"Dullness is expected and will likely continue till the year-end as foreign institutional investor activity dies down around this time of the year," said G Chokkalingam, founder, Equinomics Research & Advisory.

The focus is now on the RBI minutes, as investors seek to understand its assessment of inflation and growth.

The central bank, in its monthly bulletin on Tuesday, said inflation "may be slightly down, but it is certainly not out," but sounded optimistic about the near-term economic growth outlook.

"RBI's bulletin signalled that India's growth will be driven by domestic demand," Anita Gandhi, director at Arihant Capital Markets said, adding that indicators such as advance tax and GST collections and auto sales have shown strength.

Investors also await a host of macroeconomic data from the U.S., due later this week, to gauge the Federal Reserve's rate hike path.

Barring pharma and information technology, all the other stocks logged losses.

Diagnostics and pharma stocks jumped on fears of a resurgence in COVID-19 cases, in a weak market, after India's health minister said the pandemic is "not over yet".

The India volatility index, which gauges the extent of near-term fluctuation in the market, surged nearly 13% to 15.56, the highest since Nov 10, 2022. A reading of 15.56 indicates that prices could swing in the range of +15.56% and -15.56%, in the next thirty days.

In the IT sector, analysts expect the movement to be stock-specific as investors reshuffle portfolios in favour of value stocks.