Benchmark stock indices Sensex and Nifty tumbled on Wednesday on six key reasons. They included a selloff in IT stocks, a sharp jump in crude oil prices for the third day, a massive Rs 25,000 crore-plus foreign outflows in the first two sessions of June, and intensifying of West Asia crisis, with Iran targeting US basis in Kuwait and Bahrain and US striking Qesham Islands, dashing hopes of a peace deal. A steep fall in rupee and continued attractiveness of markets such as Korea and Taiwan also made domestic investors jittery.       

TCS, Infosys drag key indices 

Tata Consultancy Services Ltd (TCS) and Infosys together contributed over 30 per cent to the Sensex's decline. At 12.12 pm, the 30-pack index stood at 73,605.91, down 1,043.93 points or 1.40 per cent. Nifty fell 307.80 points or 1.31 per cent to 23,175.75. 

TCS plummeted 8.77 per cent to Rs 2,233.30. Tech Mahindra declined 6.11 per cent to Rs 1,475. Infosys was the third biggest loser on Sensex, falling 4.05 per cent to Rs 1,219.25. A total of 25 of 30 index stocks traded in the red. This is even as the rupee stood at 95.78 against the US dollar, depreciating 54 paise over Tuesday's closing of 95.27.

Foreign outlflows, crude big concerns 

Foreign outflows stood at Rs 25,776 crore in the first two sessions of June, as India further slipped to seventh spot in global ranking, falling below South Korea in market capitalisation race. 

Brent crude for August delivery was up 1.98 per cent at $97.90 a barrel. It gained 1.07 per cent on Tuesday and 3.18 per cent on Monday.

The escalation in the West Asia conflict has again pushed up Brent crude price to close to $97, indicating no respite to India from the energy shock, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

"The rising current account deficit and sustained FPI outflows are areas of concern. The RBI commentary and actions on June 5th will be keenly watched by the market," he said. 

Doubts over US-Iran talks 

Iranian media reported that Iran is examining the proposed deal to halt their war but has not communicated with US for a few days contradicting US President statements. IEA said global oil inventories could hit critical levels ahead of the peak summer demand period if stock draws continue at their current pace, ICICI Securities noted.

Meanwhile, the US President Donald Trump said the conversations between the US and Iran have been going on continuously ... "including four days ago, three days ago, two days ago, one day ago, and today. Where they lead, one never knows, but as I told Iran, It’s time, one way or another, for you to make a Deal. You’ve been doing this for 47 years, and it cannot be allowed to go on any longer!," he said.

Emkay Global said the impact of the energy shock and Iran war was not visible in the March quarter results but some of this may flow through in the June quarter. "There is no apparent instability in earnings momentum so far," it said.