Mumbai: Indian equities face challenges in repeating their seasonal strength in June, with uncertainty over the peace process between the US and Iran and continued foreign selling clouding the outlook. Mid and smallcap stocks stand a better chance of extending their winning run with domestic money chasing potential winners beyond blue chips.In the past ten years, both the Nifty 50 and Nifty 500 have posted gains in six instances, with average gains of 1.6% and 1.9%, respectively, according to data from Motilal Oswal Financial Services for the past decade.The Nifty Midcap 100 and Nifty Smallcap 250 were up seven times over the past decade, according to Bloomberg data."June seasonality has generally favoured Indian equities," said Sriram Velayudhan, senior vice-president, IIFL Capital Services. "However, factors like crude prices, foreign selling and the impact of adverse weather conditions on the impending monsoon will influence market sentiments in June."The Nifty and Sensex dropped by 2.6% and 2.8%, respectively, in May. The Midcap 100 was up 2.6%, and the Nifty Smallcap 250 gained 1.6%.Agenciesbeyond blue chips Local money seeks winners in broader market, but analysts say look beyond June for seasonal trends; war, oil and weather risks a drag on moodAnalysts said investors tracking seasonal trends must look beyond June."As per seasonality, May and June mostly remain mixed, but July has historically been positive," said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. "So dips or consolidation of June can be bought for the next leg of the rally for July."Selective themes such as capital markets, power, energy, auto ancillaries, infrastructure, capital goods, and wire and cable could outperform, he said.Lower foreign ownership is helping small and midcaps, unlike large caps, said Velayudhan.