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Indian shares declined on Thursday, dragged down by Larsen and Toubro after the construction company posted disappointing revenue outlook, while volatility continued to climb amid jitters over the outcome of the ongoing national elections.

The blue-chip NSE Nifty 50 fell 1.55% to 21957.50 points, while S&P BSE Sensex declined 1.45% to 72404.17, at close. The benchmarks logged their worst session since January 23.

"Investors seem wary of entering the markets before the elections (results) and many are locking their gains by booking profits," said Sonam Srivastava, founder and fund manager at Wright Research.

This fear has resulted in the country's volatility index climbing for an eleventh straight session to 18.20, highest since October 2022.

"We have seen immediate reversals in the Nifty after hitting fresh highs and this tells a lot about the jitters that the market has on account of the big event," said Abhishek Goenka, founder and chief executive of IFA Global.

The world's most populous nation began voting last month, with votes set to be counted on June 4. The election has so far seen comparatively low voter turnout compared to previous years.

On the day, twelve of the 13 major sectors declined, with construction major L&T being the top loser on the Nifty 50 and shed 6% on subdued revenue growth outlook.

Amongst day's key earnings-driven moves, the country's largest lender State Bank of India ended 1% higher after posting record profit on loan growth boost.

Hero MotoCorp continued its gains following the two-wheeler maker's profit beat on Wednesday, driving auto stocks 0.8% higher on Thursday.

On the flip side, India's biggest paints maker Asian Paints dropped about 5% after fourth-quarter profit miss.

Meanwhile, the broader, more-domestically focussed small-caps and mid-caps fell 2.8% and 1.9%, respectively, underperforming the benchmarks