INDIA STOCKS-Indian shares jump over 3% as Iran ceasefire spurs global rally; RBI on pause

By Bharath Rajeswaran

April 8 (Reuters) - Indian shares held firm on Wednesday, helped by a plunge in oil prices after President Donald Trump agreed to a two-week ceasefire with Iran, while the domestic central bank left rates unchanged as it assessed the war's impact on the economy.

The Nifty 50 .NSEI was up 3.58% at 23,953.80 and the Sensex .BSESN gained 3.74% to 77,408.32, as of 10:57 a.m. IST.

The Reserve Bank of India governor said the Iran war has dampened the country's growth and inflation outlook and that the central bank remained vigilant to act preemptively on liquidity management.

"Overall, the policy mix of a rate pause, 'neutral' stance and supportive liquidity appears neutral-to-marginally supportive for equities," said Sujan Hajra, chief economist and executive director at Anand Rathi group.

Other Asian markets .MIAPJ0000PUS climbed 5.1%, while crude prices slipped to $95 a barrel after Trump said the U.S. would suspend bombings and attacks on Iran for two weeks and that talks were progressing toward a long-term peace agreement.

The development eased fears of escalation in the conflict, which had pushed oil prices above $100 a barrel, posing risks to the global economy, corporate earnings and India's financial markets - the world's third-largest oil importer.

"The ceasefire is a welcome move and markets will see a relief rally with short covering," said Nilesh Shah, managing director at Kotak Mahindra AMC.

However, markets will keep reacting to the evolving Middle East situation, as "there could be many slips between cup and the lip," Shah said.

Fifteen of 16 major sectors advanced. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 jumped 4% each.

Domestic rate-sensitives, such as heavyweight financials .NIFTYFIN, gained 5.3%, while auto .NIFTYAUTO and realty .NIFTYREAL stocks rose 6.7% each.

Among individual stocks, Larsen & Toubro LART.NS, which has significant exposure to the Middle East, jumped 7%.

Budget carrier Interglobe Aviation INGL.NS, whose operations have been impacted by the conflict, climbed 9%.