Mumbai: (Reuters) – Indian shares were flat to higher as banks recovered after recent steep falls, though oil and gas stocks dropped after a directive from a government regulator to cut gas tariffs in New Delhi raised fears that similar actions would follow.
A banking sub-sector lost 2.9 percent over the previous two trading sessions, hit by a combination of worries about earnings and uncertainty about interest rates ahead of the central bank meeting next week.
State Bank of India gained 1.2 percent, while ICICI Bank advanced 0.4 percent.
However, gas utility stocks dropped after the Petroleum and Natural Gas Regulatory Board directed Indraprastha Gas (IGL) to cut tariffs for certain types of gas in New Delhi in a bid to reduce prices for consumers.
That sparked fears about similar directives to other gas companies, traders said.
“Such a drastic reduction in tariffs for IGL, apart from raising concerns for the company, will also likely raise concerns for possible tariff cuts for networks where tariffs are not yet determined,” Nomura said in a note to clients.
IGL dropped as much as 46 percent to 187.70 rupees, the lowest since December 2009. Shares were last trading down 30 percent.
Among other gas utilities GAIL India was down 3.1 percent, Gujarat Gas lost 7 percent, Petronet LNG declined 4.3 percent, and Gujarat State Petronet was down 7.9 percent.
The 50-share Nifty gained 0.2 percent, while the 30-share BSE index rose 0.1 percent.