INDIA STOCKS-Indian shares muted as Middle East turmoil, hawkish Fed weigh

(Updates for morning trade)

By Bharath Rajeswaran

June 19 (Reuters) - India's equity benchmarks were subdued on Thursday, as hawkish signals from the U.S. Federal Reserve and persistent geopolitical turmoil in the Middle East kept investors at bay.

The Nifty 50 held its ground at 24,816.85 and the BSE Sensex was flat at 81,442.52, as of 9:57 a.m. IST.

The broader small-caps and mid-caps fell 0.2% and 0.4%, respectively.

Seven of the 13 major sectors declined, with IT companies , which derive a significant portion of their revenue from the United States, falling 1%.

Broader Asian markets declined on the day, with the MSCI Asia ex-Japan index slipping 1.2% after the Fed left interest rates steady but signalled a slower path for rate cuts, projecting two reductions by year-end.

Fed Chair Jerome Powell noted that goods inflation could accelerate over the summer, partly driven by tariffs linked to U.S. President Donald Trump's trade policies.

Concerns over escalating geopolitical risks stayed front and centre in global markets.

The Israel-Iran conflict stretched into a seventh day, with Iranian Supreme Leader Ayatollah Ali Khamenei rejecting Trump's demand for unconditional surrender. In response, Trump said his patience had run out and warned of unpredictable consequences.

Trump's "all options on the table" remark has dialled up fears of U.S. entry into the Israel-Iran conflict, casting a long shadow over sentiment, said Akshay Chinchalkar, head of research at Axis Securities.

Analysts noted that consistent buying by domestic institutional investors over the past 22 sessions has acted a key buffer, cushioning Indian markets from deeper declines.

Among individual stocks, Puravankara jumped 7% on securing a contract worth 2.72 billion rupees ($31.43 million) for a Bengaluru residential project.

Data Patterns gained 2% after CRISIL Ratings upgraded the company's long-term credit rating on its bank facilities to A+/Stable.

Aavas Financiers climbed 2% after Goldman Sachs retained "buy" and forecast strong growth and profitability in fiscal years 2025 to 2027.

($1 = 86.5400 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)