INDIA STOCKS-Indian shares muted after previous session's sell-off on simmering US-Iran tensions

By Bharath Rajeswaran and Vivek Kumar M

Feb 20 (Reuters) - India's equity benchmarks were little changed on Friday, after the previous session's steep decline, as oil prices hit a six-month high on rising U.S.-Iran tensions, a worry for the net energy-importing nation.

The Nifty 50 .NSEI added 0.03% to 25,465, and the BSE Sensex .BSESN shed 0.07% to 82,467.7, as of 9:42 a.m. IST. The pair fell about 0.3% at the open, before paring losses.

Both the benchmarks slid about 1.5% on Thursday, their biggest drop in more than two weeks.

Eight of the 16 major sectors logged losses at the open. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 traded flat.

U.S. President Donald Trump warned Iran on Thursday that it must make a deal over its nuclear program or "really bad things" will happen, and set a deadline of 10 to 15 days, drawing a threat from Tehran to retaliate against U.S. bases in the region if attacked.

Brent crude oil prices rose to $71.87 per barrel on Friday, extending their three-day gains to 6.6%. Higher crude prices are a negative for India as it is the world's third-largest crude oil importer. O/R

"Any escalation involving Iran could impact shipments through the Strait of Hormuz, which would be particularly negative for India given its heavy dependence on crude imports from the region," said Siddhartha Khemka, head of research at Wealth Management at Motilal Oswal Financial Services.

"We expect markets to remain cautious in the near term given the geopolitical risks and possibility of oil supply disruption," Khemka said.

The IT index .NIFTYIT fell 0.8%. IT stocks are down 2% so far this week, after dropping 8.2% last week, their worst showing in 10 months, on concerns over the impact on earnings due to AI-linked disruption.

Bucking the broader trend, ABB India ABB.NS rose 4.7% despite posting a drop in December quarter profit, with analysts expecting robust order inflows and sustained investments in infrastructure, rail, grid monetisation to boost its future earnings.