INDIA STOCKS-Indian shares ease at open, investors eye Fed policy decision

Updates for morning trade

By Vivek Kumar M

Dec 8 (Reuters) - India's equity benchmarks inched lower in early trade on Monday, reflecting cautious sentiment globally as investors awaited the U.S. Federal Reserve's policy meeting later this week.

The Nifty 50 .NSEI and the BSE Sensex .BSESN fell 0.4% each to 26,081.85 and 85,401, respectively, as of 9:57 a.m. IST.

Fifteen of the 16 major sectors were down. The broader mid-caps .NIFMDCP100 and small-caps .NIFSMCP100 lost 0.4% and 0.8%, respectively.

"The market is waiting for clear signals from the Fed before taking the next decisive direction," said Ponmudi R, chief executive officer of Enrich Money.

The Fed is expected to cut rates by 25 basis points this week. However, the meeting could be one of the most fractious in recent memory, with some policymakers openly arguing against an easing.

Lower interest rates in the U.S. bode well for emerging markets such as India, as it helps bring foreign inflows to the equities in these countries.

MSCI's broadest index for Asia Pacific stocks outside Japan .MIAPJ0000PUS was trading flat on the day. MKTS/GLOB

Investors were also awaiting details on a potential trade deal between India and the United States. Washington has imposed a 50% tariff on Indian imports, which is among the highest for any of its trading partners, partly over India's Russian oil purchases.

"The conditions are good for the market in terms of earnings and overall domestic macro set up. The sentiment is getting impacted by the missing trade deal, which is the only missing piece for markets as of now," said Pankaj Pandey, head of retail research at ICICI Securities.

Among stocks, India's largest airline, IndiGo INGL.NS shed 4%, extending its losing streak from last week. The country's aviation watchdog issued a show-cause notice to the airline on Monday after thousands of flights were cancelled last week, grounding tens of thousands of passengers.

(Reporting by Vivek Kumar M in Bengaluru; Editing by Sumana Nandy, Rashmi Aicha and Eileen Soreng)

((VivekKumar.M@thomsonreuters.com;))