Updates for markets close

By Bharath Rajeswaran and Vivek Kumar M

May 29 (Reuters) - India's equity benchmarks fell on Friday and posted monthly losses as uncertainty over a U.S.-Iran peace deal prompted investors to lock in gains after April's strong rally.

The Nifty 50 .NSEI fell 1.5% to 23,547.75 and the BSE Sensex .BSESN shed 1.44% to 74,775.74 on Friday, taking their monthly losses to 1.9% and 2.8%, respectively.

Losses swelled in the last half an hour's trade on Friday as index provider MSCI's May index rejig came into effect.

While India enjoyed a surge in its weight in MSCI EM index between 2020 and 2024, rising to about 20% in July 2024, it is expected to come down to 11.2% after the latest MSCI rebalancing, as per IIFL Capital.

The 50-stock index had plunged 11.3% in March before rebounding 7.5% in April.

"We are unlikely to see a consistent rise in Indian stocks unless the uncertainty over U.S.-Iran conflict is clearly behind us," said Arun Malhotra, founder and fund manager at CapGrow Capital.

Brent Crude futures LCOc1 fell 19% in May, but remain 27.3% above the levels seen ahead of Iran war. India is the world's third biggest crude importer.

Elevated oil prices and lack of AI trade have kept Indian market out of favour among foreign investors, analysts said.

Ten of the 16 major sectors logged monthly losses. Broader markets outperformed, with the small-cap .NIFSMCP100 and mid-cap .NIFMDCP100 indexes rising 0.7% and 3.2%, respectively, on earnings optimism.

Heavyweight financials .NIFTYFIN and IT stocks .NIFTYIT lost 1.2% and 0.9%, while Reliance Industries RELI.NS shed 7.7%.

ONGC ONGC.NS fell 11.4% on profit booking after a 25% rise over the previous four months, and on concerns over production delays at key projects.

ITC ITC.NS declined 8.9% as analysts flagged that recent price hikes will likely weigh on cigarette volumes in June.

Adani Enterprises ADEL.NS surged 22%, after the U.S. dropped fraud charges against Gautam Adani.

Hindalco HALC.NS and National Aluminium NALU.NS gained 8.6% and 6.3% as steady domestic demand, pricing comfort and global supply worries linked to the Iran war lifted metal prices.