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Indian shares logged their worst session in more than a month on Monday, weighed down by uncertainty around the hotly-contested U.S. presidential election, while volatility spiked to a three-month high.

The NSE Nifty 50 fell 1.27% to 23,995.35, while the BSE Sensex lost 1.18% to 78,782.24. Both benchmarks logged their biggest single-day drop since Oct. 3.

"Investors are cautious. They are refraining from making major bets and are taking profits because of uncertainty over U.S. presidential elections," said Kranthi Bathini, director of equity strategy at WealthMills Securities.

The benchmarks fell about 6% each in October on record monthly foreign outflows and dull earnings. They had gained 15% in the previous four months and hit record highs, but are still overvalued compared to historical averages, according to analysts.

In the U.S., Democrat Kamala Harris and Republican candidate Donald Trump remain virtually tied in opinion polls ahead of Tuesday's election and the winner might not be known for days after voting ends.

"While a potential victory for Harris is seen as a neutral-to-positive event for markets, a Trump victory is seen as a positive due to his pro-corporate policies, including the plan to cut tax rates for companies," said Bathini.

Meanwhile, markets have priced in a 25-basis-point rate cut from the U.S. Federal Reserve on Nov. 7. Lower U.S. rates could spur higher foreign inflows into emerging markets such as India.

All the 13 major sectors logged losses on the day, while the broader, more domestically focussed small- and mid-caps lost 2% and 1.3%, respectively.

The Nifty volatility index rose to 16.69, its highest since early August.

Forty-two of the Nifty 50 constituents declined. Among them, Sun Pharma retreated 2.6% after a U.S. court granted U.S.-based Incyte Corp's preliminary injunction to prevent the Indian firm from launching a key drug.

Two-wheeler maker Bajaj Auto lost 3.6% after posting lower domestic sales in October.

Hero MotoCorp dropped 4.3% after CLSA flagged a decline in market share last month.