(Updates)

• Indian gems and jewellery stocks fall 5.5%-11% after PM Narendra Modi urgescitizens to avoid buying gold to save foreign exchange, following U.S. President Donald Trump rejectionof Iran's response to a peace proposal

• Titan falls as much as 7.95% to 4,150.10 rupees; Kalyan Jewellers drops ~10% to 382.10 rupees; Senco Gold sheds ~11% to 325.05 rupees

• Titan, Kalyan Jewellers reported quarterly results on Friday; y/y net profit up ~35.4% and ~118%, respectively, driven by strong demand

• Brokerages say TITN's market-share gains and buyer growth recovery continue to support medium-term growth outlook despite elevated gold prices

• Expect resilient margins aided by lightweight jewellery, exchange schemes

• Analysts say KALN's rapid store expansion in newer markets continues to support growth

• Operating leverage is helping offset margin pressure from higher gold prices, franchise mix for Kalyan

(Reporting by Bipasha Dey in Bengaluru)