The Sensex and Nifty ended lower on Wednesday, as uncertainties around the composition of the next government in Karnataka hurt investor sentiment. Weaker global cues also contributed to losses. No party achieved a clear majority in the election results announced on Tuesday, leading to uncertainty over the formation of the next government.

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The Sensex ended at 35,387, down 156.06 points, while the broader Nifty50 ended at 10,741, down 60.75 points. In the broader market, the BSE Midcap slipped 0.3 per cent, while the BSE Smallcap remained little unchanged. 

Market breadth, indicating the overall health of the market, remained negative. On the BSE, 1,603 stocks declined, 1,019 stocks rallied, while 135 stocks remained unchanged

"Uncertainty over the formation of government in Karnataka and lower than expected quarter earnings have created concern about market direction. Fall in oil prices and appreciation in rupee helped to trim the day’s losses. Consumption oriented companies are performing well on the account of increased spending in rural market leading to better quarterly results," said Vinod Nair, Head of Research, Geojit Financial Services.

Hindustan Unilever, ITC, Wipro, Yes Bank, Tata Motors (DVR), gained the most on Sensex, while ICICI Bank, Reliance Industries, State Bank of India, Hero MotoCorp, and Adani Ports were the major losers.

On the Nifty, the top gainers were Hindustan Unilever, Lupin and ITC. The major losers were ICICI Bank, Cipla and UltraTech Cement. 

Among individual stocks, Punjab National Bank (PNB) share price tanked over 13 per cent intraday to hit its 52-week low of Rs 74.30 after the public sector bank posted largest ever quarterly loss of Rs 13,416.91 crore for the January-March period of financial year 2018. The stock settled at Rs 75.55, down 12 per cent on the BSE.

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Syndicate Bank share price cracked over 12 per cent on Wednesday to hit its lowest in nine years after the public sector lender reported a net loss of Rs 2,195.12 crore in the last quarter ended March 31. The losses came due to high bad loans that required higher provisioning.

Meanwhile, Credit Suisse reiterated its underweight call on India in an Asia Pacific context. The brokerage believes overvalued markets could stay overvalued for longer than expected especially if the US-China trade war escalates, but cautioned that India could be the next shoe to drop.

"We believe the current combination - close to highest ever premiums versus the region, four consecutive years of downgrades to consensus EPS, current account deficit, rising oil prices further pressuring the current account and fiscal deficits and the fact that foreign investors have yet to capitulate - suggest India could be the next shoe to drop," the report noted.