(Updates for markets close)

By Bharath Rajeswaran and Vivek Kumar M

Sept 15 (Reuters) - India's equity benchmarks inched

lower on Monday, dragged by information technology stocks, as

investors traded cautiously ahead of an expected U.S. Federal

Reserve rate cut at its policy meeting this week.

The Nifty 50 fell 0.18% to 25,069.20, snapping an

eight-session winning streak, its longest in a year. The BSE

Sensex dipped 0.15% to 81,785.74.

The Nifty had risen 1.5% last week, supported by optimism

over U.S.-India trade negotiations and government tax cuts aimed

at boosting consumption.

"After the recent rebound, slight profit booking or a minor

time-wise consolidation cannot be ruled out. However, such dips

could offer fresh entry opportunities," said Dhupesh Dhameja,

derivatives research analyst at SAMCO Securities.

On Monday, nine of the 16 major sectors advanced.

IT, which had climbed 4.3% last week, fell 0.6%

and was the biggest drag.

Realty shares gained 2.4% on plans to ease

height restrictions on buildings in the north Indian city of

Noida and upbeat brokerage commentary.

Asian markets were flat ahead of the Fed meeting on

Wednesday, with investors betting on a rate cut that could

weaken the dollar and boost flows to emerging

markets.

"While liquidity is tightening due to persistent foreign

outflows, promoter selling, and a shift to robust initial public

offerings, a Fed rate cut and progress in U.S.-India trade talks

could quickly spark recovery," said G. Chokkalingam, founder and

head of research at Equinomics Research.

Small-cap and mid-cap

indexes rose 0.8% and 0.4%, respectively.

Telecom infrastructure firm Railtel Corp surged

6.5% on an order win worth 2.1 billion rupees ($23.81 million).

Defence stocks advanced after India

unveiled a new procurement framework for armed forces.

Alcohol beverage companies Radico Khaitan and

Allied Blenders rose about 3.8% and 3% respectively,

after Jefferies initiated coverage with a "buy" rating.

Rice exporter KRBL tumbled 9.6% after an

independent director resigned, citing corporate governance

issues.

($1 = 88.1837 Indian rupees)