June 19 (Reuters) - India's equity benchmarks were muted

on Thursday and the broader markets declined, as investors

stayed cautious amid escalating Middle East tensions and hawkish

U.S. monetary policy cues.

The Nifty 50 fell 0.08% at 24,793.25 and the BSE

Sensex lost 0.1% to 81,361.87.

Twelve of the 13 major sectors logged losses.

The auto index defied broader weakness to close

0.5% higher, with Mahindra & Mahindra extending gains

after it received antitrust approval for its proposed

acquisition of SML Isuzu.

Asian and European markets declined on the day.

Gold and the dollar gained as safe-haven demand rose after

U.S. President Donald Trump said America "may or may not" join

Israel's strikes on Iran, escalating fears of U.S. entry into

the Israel-Iran air war.

"The conflict threatens to choke supply near the Strait of

Hormuz, a key trade route, and spur a rise in crude prices,

which is a fast-track to inflation and market jitters," said

Ross Maxwell, global strategy lead at VT Markets.

The broader small-caps and mid-caps

closed 2% and 1.6% lower, respectively, with

analysts attributing their underperformance to their weaker

buffer against rising crude prices relative to large-caps.

Overnight, the Fed left interest rates steady but projected

two reductions by the year-end and signalled a slower path for

rate cuts.

"The status quo on rates, even amidst the wave of criticism

from Trump and Fed Chair Jerome Powell's commentary, indicated

high uncertainty over the impact of tariffs," said analysts led

by Hitesh Suvarna of JM Financial.

Among individual stocks, Biocon rose 2% after HSBC

expected a successful qualified institutional placement to ease

debt and help sharpen its focus on the biosimilars segment.

Tata Consumer gained 2.2% after the company said

it has a "sizable amount of gunpowder" for acquisitions at the

right price.

($1 = 86.5400 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by

Janane Venkatraman, Jacob-Phillips and Mrigank Dhaniwala)