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Domestic equity benchmark indices declined during early trade on Monday, weighed mainly by FMCG, IT and media stocks.

Even as the Reserve Bank of India is likely to raise policy rates in the monetary policy review meeting beginning on Monday, investors, however, await the actual degree of percentage hike before taking fresh positions in the markets.

Investors also await other macro economic forward looking guidances from the the central bank.

At 9.44 a.m., Sensex was 0.7 per cent down at 55,397 points, whereas nifty 0.6 per cent down at 16,489 points.

"For India elevated crude prices and a $23 billion trade deficit in May are areas of concern. Even though FPI selling has come down in early June they are likely to sell more at higher levels," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"The US dollar index above 102 is negative for emerging markets equity. The positive factor for India is that the domestic institutional investors and retail investors consistently buying the dips."

Besides, Asian shares made a muted start on Monday as caution gripped ahead of a critical reading on the US inflation, while the euro gained on the yen amid risk the European Central Bank will take a major step toward policy tightening this week, said Deepak Jasani, Head of Retail Research, HDFC securities.