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Indian benchmarks saw their worst session in nearly three weeks on Wednesday, dragged down by heavyweight financials and information technology stocks amid uncertainty around domestic election results and the timing of U.S. rate cuts.

The blue-chip NSE Nifty 50 closed 0.8% lower at 22,888.15 points, while the S&P BSE Sensex settled 0.9% lower at 75,170.45 points, as of 3:30 p.m. IST.

Financial services stocks ended 1.65% lower, snapping four sessions of gains. HDFC Bank dropped 1.5%, snapping a five-day winning streak.

The Nifty bank index dropped 1.3%.

Meanwhile, the volatility index eased slightly during the session but hovered near two-year highs.

Uncertainty about the margin of victory for the ruling Bharatiya Janata Party has driven volatility, analysts said. Vote counting will take place on June 4.

"Investors are booking profits and waiting anxiously as we enter a big event (election outcome) next week," Narendra Solanki, research head at Anand Rathi said.

"Volatility will remain elevated and the markets will only see a definite move post the results," Solanki added.

U.S.-rate cut sensitive IT stocks ended 1% lower.

Global equities traded lower as doubts about the timing and extent of Federal Reserve rate cuts resurfaced. [MKTS/GLOB]

Paytm ended 5% higher on a media report that Indian billionaire and Adani Group chairman Gautam Adani was looking to buy a stake in the digital payments firm. Adani Enterprises closed 0.5% higher.

Both firms, however, denied the report on the stake sale talks.

Top percentage Nifty gainer Hindalco Industries hit a record high after unit Novelis said it is targeting up to $12.6 billion valuation in U.S. initial public offering.

Prestige Estates Projects ended 3% lower after quarterly profit slump, dragging Nifty realty index to close down 0.9%.

More domestically-focused small-caps added 0.06%.