BENGALURU, May 27 Reuters Indian stocks closed lower on Monday as an extended rally in financial stocks on the central bank39;s record dividend last week was offset by a drop in energy firms, with volatility remaining high on nerves around elections results.

The bluechip NSE Nifty 50 closed 0.11 lower, while the SP BSE Sensex settled 0.03 lower at 75,390.50 points. Both the benchmarks rose about 0.7 each and hit record highs earlier in the session.

Heavyweight financial stocks ended 0.52 higher, extending its rally from last week on positive investor sentiment post the Reserve Bank of India39;s record dividend to the government.

Analysts believe that the dividend payout can help the government reduce its fiscal deficit.

The Nifty Bank Index, staterun lenders and private banks also added 0.61.33 to be among top sectoral gainers. Energy stocks, however, dropped 0.82 as investors curiously await the OPEC meeting later in the week, which could have a nearterm impact on oil prices.

Meanwhile, volatility in the country39;s stock markets remained elevated as reports of lower voter turnout in the elections and voter fatigue fan doubts about the margin of victory for the ruling party when the results are announced on June 4.

The volatility index rose to its highest level since nearly 2 years.

This would be last week where we await the outcome of the national general elections so volatility will continue to remain at elevated levels … due to nervousness about the outcome,…