June 2 (Reuters) - Indian shares extended their losing streak on Tuesday as hostilities in the Middle East persisted and unprecedented foreign outflows pressured markets.

Brent crude hovered around $94 per barrel amid stalled peace talks between the U.S. and Iran to resolve the three-month-old war that has pushed energy prices higher, raising inflation and growth concerns in Asia's third-largest economy.

Lebanon announced a partial ceasefire between Hezbollah and Israel in what would amount to a limited de-escalation of a conflict that has killed thousands and inflamed the broader U.S.-Israeli war with Iran.

India's Nifty 50 fell 0.44% to 23,281.10, while the BSE Sensex shed 0.4% to 73,969.01, as of 9:50 a.m. IST. The indexes have fallen 2.7% and 2.9%, respectively, over four sessions.

Fourteen of the 16 major sectors declined while the broader small-caps and mid-caps lost 0.3% and 0.6%, respectively.

"Traders remain wary of fears of widening Middle East conflict and possible disruption to global oil supply chains and the potential inflationary impact due to higher energy prices," said Gaurav Garg, research analyst at Lemonn Markets Desk.

"Despite selective strength in IT companies, overall market sentiment remains subdued, also hurt by continued foreign outflows," Garg said.

Foreign investors sold shares worth 39.12 billion rupees ($411.8 million) on Monday, provisional data showed. They have offloaded $26.4 billion worth of shares so far in 2026, surpassing 2025's record outflow.

IT stocks gained 2.8%, taking their three-session rise to 5.8% after U.S.-based cloud software firm Snowflake's results boosted optimism around demand for software services. Despite the rally, the IT index is down 19% in 2026 so far, hurt by muted earnings and concerns over AI-led disruption.

Heavyweight financials lost 1.1% with top private lender HDFC Bank dropping 1%.

State-owned hydropower company NHPC lost 4.3% after the government announced an offer for sale of up to 6% stake at an 8% discount to its last close.

(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Ronojoy Mazumdar and Mrigank Dhaniwala)