(Updates for morning trade)

By Vivek Kumar M and Bharath Rajeswaran

May 8 (Reuters) - Indian benchmark indexes were subdued

on Thursday, as investors weighed geopolitical tensions with

Pakistan, persistent concerns over inflation and unemployment

risks in the United States.

The Nifty 50 was flat at 24,411.5 and the BSE Sensex

was tepid at 80,776.75, as of 10:26 a.m. IST.

"The major overhang of a significant escalation seems to be

in the backburner, as of now. That has also led to a drop in the

volatility index," said Sunny Agrawal, head of fundamental

equity research at SBICAPS Securities.

The volatility index, often called the fear gauge,

eased after climbing in nine of the past 10 sessions, following

a deadly attack last month by Islamist militants on Hindu

tourists in Indian Kashmir that left 26 dead.

Seven of the 13 major indexes recorded gains. The broader

small-caps and mid-caps rose 1.2%

and 0.5%, respectively.

India hit Pakistan and Pakistani Kashmir with missiles on

Wednesday, and Pakistan vowed to retaliate saying it shot down

five Indian aircraft, in the worst clash in more than two

decades between the nuclear-armed neighbours.

While tensions prompted investor caution, foreign portfolio

investors (FPIs) continued to buy, pointing to hopes of a U.S.

trade deal and India's economic resilience as key positives.

FPIs have purchased Indian shares worth 450.55 billion

rupees ($5.3 billion) in the past 15 sessions, recording their

longest buying streak in two years.

Overnight, in a widely expected decision, the U.S. central

bank kept rates unchanged, but said the risks of higher

inflation and unemployment had risen. Chair Jerome Powell's

comments further clouded the U.S. economic outlook as its

policymakers grapple with the potential impact of President

Donald Trump's tariffs.

Shares of India's Tata Motors, which makes the

luxury Jaguar Land Rover cars in Britain, advanced 2.5% on

Thursday following reports that the U.S. and the UK could likely

announce a trade deal later in the day.