Indian shares declined on Monday while volatility climbed with key equity benchmarks giving up most gains made this year on concerns over the outcome of ongoing national elections and sustained selling by foreign investors.

The blue-chip NSE Nifty 50 was down 1.03% at 21,828.7 points, while S&P BSE Sensex lost 1.08% to 71,880.07, as of 10:45 a.m. IST.

The Nifty is up less than a percent for the year, while the Sensex is down marginally.

Volatility in Indian markets surged to 21.05, the highest since October 2022.

"The volatility in the market is due to concerns over election results and foreign selling," said Anil Rego, founder and fund manager at Right Horizons.

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

Foreign portfolio investors (FPIs) have offloaded shares worth 170.83 billion rupees ($2.05 billion) in just seven sessions in May, the highest since January.

Foreign investors sold $1 billion in April after buying $4.2 billion in March.

Investors are getting anxious, indexes are dropping and FPIs are continuing to sell and these factors should further lead to a spike in volatility, said Sreeram Ramdas, vice president of Green Portfolio.

The benchmarks lost about 1.8% each last week, the worst weekly performance in about two months.

Market technicals are also pointing to weakness. The benchmark Nifty 50 has slipped below its 100-day and 50-day moving averages.

"Markets do not like uncertainty," said Mohit Khanna, fund manager at Purnartha One Strategy.

"Recent lower voter turnout and not-so-exciting management commentary from several companies like Tata Motors in the ongoing earnings season have added to selling pressure," Khanna said.

Forty of the Nifty 50 stocks declined on the day. Twelve of the 13 major sectors logged losses.

Tata Motors slumped about 9% and was the top Nifty 50 loser on the day after the automaker forecast flat margin growth at its luxury JLR business.

On the flip side, Cipla jumped about 5.5% on the drugmaker's strong margin outlook post fourth-quarter results.

Investors are also awaiting data on domestic inflation, which likely eased in April, according to a Reuters poll of economists. ($1 = 83.5150 Indian rupees)

(Reporting by Bharath Rajeswaran and Hritam Mukherjee in Bengaluru; Editing by Nivedita Bhattacharjee, Sonia Cheema and Eileen Soreng)