SynopsisIndian smallcap and midcap stocks plummeted on Wednesday due to persistent FII selling, a weakening rupee, and global factors. IT stocks, which had surged previously, saw a sharp selloff, with major players like TCS and Infosys dropping significantly. Analysts point to energy shocks and current account deficit concerns impacting market sentiment.ETMarkets.comThe shares of several smallcap and midcap companies tumbled in trade, as broader markets sharply crashed on Wednesday amid persistent FII selling, weakening rupee and other factors.The Nifty Midcap 100 index crashed 1.6% (nearly 950 points) while the Nifty Smallcap 100 index lost 1.4% (around 254 points), as seen at 12.20 pm. The broader market indices are currently underperforming the benchmark index Nifty 50, which dropped around 1.3%.Top midcap losersCoforge and Persistent Systems shares were the top midcap losers, dropping more than 6% each. This came amid an overall downturn in IT stocks which earlier saw a sharp surge over consecutive sessions despite overall market volatility. Nifty IT index jumped more than 4% on Tuesday to record its highest single day gain since May 2026. The index soared nearly 8% in just three sessions, while Nifty 50 declined 2%. Today’s sharp selloff in IT stocks, with heavyweights TCS, Infosys and others crashing nearly 10%, led to Nifty IT tumbling around 6%.Tata Elxsi and PB Fintech shares tumbled more than 5%, while Mphasis, Prestige Estates, KPIT Tech, Patanjali Foods, OFSS, Dixon Tech and Mahindra & Mahindra Finance shares dropped around 4% each. 360 ONE WAM, Max Financial Services, Adani Total Gas, Godfrey Phillips India, Paytm, RVNL, Motilal Oswal Financial Services, Ashok Leyland, BHEL, CONCOR, IndusInd Bank, Oberoi Realty, MCX and other stocks sank around 3% each to follow.Also read: IndusInd Bank shares fall 3% after fresh whistleblower complaint reaches PMO, RBITop smallcap losersPhysicswallah shares tumbled nearly 6% to emerge as the top smallcap loser. The shares of the edtech platform have now plunged 18% in one week, 16% in one month and 31% in 2026 so far. JM Financial and Angel One shares followed, dropping 5% and 4% respectively amid the market downturn.Tata Technologies, Creditacess Grameen, NBCC and Zensar Technologies shares fell around 4% each, while CAMS, Triveni Turbine, PNB Housing Finance, Firstsource Solutions, Aarti Industries and Sagility shares dropped over 3% each.What lies ahead?The mild 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. “Rupee has edged down to 95.26 to the dollar. The sustained fall in the rupee has been arrested for now but 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 added.Meanwhile, the analyst highlighted that the bull run in semiconductor giants South Korea and Taiwan continues unabated. The giant companies like Samsung, SK Hynix and TSMC, who have huge pricing power, are expected to post hugely impressive profit numbers this year and perhaps next year. It is a fact that the bull run in these markets and in US and Japan are driven by expectations of high earnings growth, he said.“In contrast, in India earnings growth in FY 27 will be modestly weighed down by lower growth and higher inflation. All these factors have impacted sentiments in the market. The saving grace is the confidence shown by the retail investors who continue to invest money despite the headwinds. Even though the sustained FPI outflow is a strong headwind, the fair valuations, the recovery in earnings growth reflected in Q4 numbers and the strong domestic flows can impart resilience to the market,” Vijayakumar further said.Also read: Why is the stock market crashing today?(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. 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