Indian shares traded lower on Wednesday amid a further spike in volatility, while a decline in Dr Reddy's Laboratories on a subdued mid-term outlook also weighed on sentiment.

The blue-chip NSE Nifty 50 was down 0.4% at 22,216 points, while the S&P BSE Sensex shed 0.5% to 73163, as of 10:25 a.m. IST.

India's volatility index rose as much as 7.7% to 18.32 on the day, hitting a 15-month high for the third straight session as uncertainty around the national elections, relentless foreign selling, and analysts' reactions to corporate results kept investors jittery.

The seven-phase elections, where Prime Minister Narendra Modi is seeking a rare third term, started in April, with votes set to be counted on June 4. Voter turnout has so far been comparatively low against previous years.

"When the elections started last month, markets were expecting the existing incumbent government to return with a very strong majority," said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management.

The low turnout sends a message that such a big majority for the ruling party may not be the case, he added.

Meanwhile, drugmaker Dr Reddy's was the top loser on the Nifty 50, dropping 4% despite beating quarterly profit estimates, with analysts flagging that its core business missed expectations.

"We believe price erosion in its U.S. base business, its high dependence on Revlimid, lower chronic mix in its India portfolio... will keep its earnings growth tepid over FY25-27," CLSA analysts said.

Auto stocks shed 0.2% after an industry body issued a weak outlook owing to election uncertainties and heavy discounting on passenger vehicles.

In contrast, oil and gas and energy stocks gained 1.1% and 0.8%, respectively.

Refiner Bharat Petroleum Corp and top miner Coal India were biggest gainers on the energy index, adding 1.7% and 1.4%, respectively.

However, home appliances-maker Voltas slipped 7% after it missed quarterly profit estimates.

More domestically-focussed small-caps gained 0.4% while mid-caps shed 0.1%. (Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza, Varun H K and Sonia Cheema)