Indian shares slipped in early trade on Monday on concerns about privately-held Global Trust Bank, after the government at the weekend froze all but its essential operations for up to three months.
The 30-share Bombay Stock Exchange index was 0.24 percent lower at 5,061.00 points by 10:20 a.m. Gainers outnumbered losers 428 to 336 in brisk trade of 25 million shares.
The broader National Stock Exchange index was flat at 1,601.10 points.
Global Trust Bank opened 20 percent lower, the maximum permissible limit, at 10.54 rupees.
"The fears are overdone at this point -- this is a knee-jerk reaction, and some worries will be ironed out as more details emerge," said Sandeep Shenoy, an analyst at Pioneer Investcorp.
But negative sentiment weighed on the sector, with State Bank of India, India's largest commercial bank, down 1.7 percent at 456.50 rupees and ICICI Bank, the No. 2 commercial bank, more than 2 percent lower at 255.75 rupees.
"But the undertone remains firm because of good corporate earnings so far, and in anticipation of the TCS issue," Shenoy said. "Investors are making way for it by selling stocks that may be impacted by worries about the monsoon."
The initial public offer of Tata Consultancy Services Ltd. (TCS), India's biggest software services exporter, opens on Thursday. It will be India's biggest IPO so far.
But software firms were lower on Monday, tracking losses on the Nasdaq. Bellwether Infosys Technologies Ltd., the No. 2 exporter, fell nearly 1 percent to 1,442.90 rupees.
Oil refiners rallied after India's oil minister gave them "limited freedom" to raise petrol and diesel prices.
Indian Oil Company, the biggest refiner, rose 4.5 percent to 376.80 rupees and index heavyweight, explorer Oil and Natural Gas Corp. rose 1.6 percent to 710 rupees.
Maruti Udyog Ltd., India's biggest car maker, rose nearly 1 percent to 428.55 rupees in anticipation of strong quarterly numbers, due to be reported later in the day.
