Benchmark equity indices declined in early trade on Wednesday amid a sluggish trend in Asian markets and cautious approach adopted by investors ahead of the US Fed interest rate decision.

Also, retail inflation rising to a three-month high of 5.55 per cent in November added to the weak trend in equities.

The 30-share BSE Sensex declined 130.21 points to 69,420.82. The Nifty dipped 29.05 points to 20,877.35.

Among the Sensex firms, Tata Consultancy Services, Axis Bank, Infosys, Bajaj Finance, Bajaj Finserv and HDFC Bank were the major laggards.

NTPC, Power Grid, UltraTech Cement and Larsen & Toubro were among the major gainers.

In Asian markets, Seoul, Shanghai and Hong Kong were trading lower while Tokyo quoted in the positive territory.

The US markets ended in the positive territory on Tuesday.

Global oil benchmark Brent crude declined 0.20 per cent to USD 73.09 a barrel.

Foreign Institutional Investors (FIIs) were buyers on Tuesday as they bought equities worth Rs 76.86 crore, according to exchange data.

Snapping its declining trend, retail inflation rose to a three-month high of 5.55 per cent in November on firming food prices, including vegetables and cereals, though it remains within the RBI's comfort zone of less than 6 per cent.

"From the global perspective, tonight's Fed message is important in setting the global market trend. Markets will wait for the Fed chief's message before taking a decisive turn," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

After a two-day rally, the BSE benchmark fell by 377.50 points or 0.54 per cent to settle at 69,551.03 on Tuesday. The Nifty declined 90.70 points or 0.43 per cent to 20,906.40.