GAIL India snapped at the markets after Citigroup cut its price target

GAIL India, the top gas transporter, snapped a 2-day advance after Citigroup cut its price target on the public sector giant by 5.6 percent on news reports the government was planning to reduce prices of natural gas.

The government may cut the prices of gas to the original $4.2 mmbtu on Oct 1st, when the revision is due, from $4.8 mmbtu now, news reports said. A fall in prices of gas would also mean lower transportation fees.

Therefore, Citigroup cut its price target on GAIL to 387 rupees from 410 rupees earlier.

As a consequence, GAIL slumped 10.75 rupees, or 3.1 percent, to 331.35 rupees on the National Stock Exchange where 4 lakh shares were traded compared with a 1-week average of 13 lakh shares. Its futures were the second biggest losers on the derivatives space and they showed a built up of short positions with open interest rising 3.1 percent.

(Image credits: Indiatimes)