Benchmark stock market indexes had a steep decrease on Wednesday; the Nifty50 dropped below 22,700 levels, while the BSE Sensex dropped more than 600 points.

By 11:20 a.m., the NSE Nifty50 was down 176.50 points at 22,711.65, while the BSE Sensex had lost 602.14 points to 74,568.31. All industries were affected by the massive sell-off, with major players including HDFC Bank, M&M, ICICI Bank, L&T, Reliance, and Axis Bank among the top losses.

Nifty Financial Services down 0.6%, while Nifty Auto fell 0.8%, as sectoral indexes also saw decreases. Reductions were also seen in other industries, such as FMCG, IT, Healthcare, Pharma, and Oil & Gas.

It should be mentioned that Dalal Street had lost money for the fourth straight session as investor trepidation grew ahead of critical US inflation data that is anticipated later this week.

It is expected that the statistics would give hints regarding future interest rate decisions made by the Federal Reserve.

Analysts also pointed out that market apprehension over the GDP statistics and exit polls for the Lok Sabha elections, which are set to take place on May 31, is the reason why volatility is still at a two-year high. 

While there are encouraging signs, such as new highs in the Nasdaq Composite led by tech stocks, caution is advised because the India VIX has reached a two-year high ahead of important events like GDP statistics and exit polls, according to Prashanth Tapse, Senior VP (Research) at Mehta Equities.

"Caution is advised as India VIX is at a two-year high of 24.20, ahead of significant events such as exit polls and GDP data," Tapse stated.

Choice Broking's Research Analyst Deven Mehata noted that Nifty may find support at 22,800, with 22,950 and 23,000 serving as immediate resistance levels.

Indian markets saw flat trading throughout the day yesterday before plunging in the last hour and closing close to the day's low. On a closing basis, traders holding long positions have to establish a tight stop loss at 22800," he continued.