Nov. 18 (Bloomberg) -- India’s benchmark stock index fell, snapping a three-day 2.1 percent gain. ICICI Bank Ltd. slid after HSBC Holdings Plc Chairman Stephen Green said new rules may reduce the amount of credit available.

ICICI Bank, the nation’s second-largest lender, declined 1.6 percent after Green said there is a danger that requirements to increase capital held by banks may have the effect of reducing credit in the global economy.

“Investors need to be cautious,” said U. K. Sinha, chairman at UTI Asset Management Co., India’s oldest money manager. “After September results, nothing positive has happened to drive markets higher.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, declined 51.87, or 0.3 percent, to 16,998.78. The S&P CNX Nifty Index on the National Stock Exchange slid 0.2 percent to 5,054.70. The BSE 200 Index was little changed at 2,117.61.

ICICI Bank lost 1.6 percent to 905.50 rupees, while State Bank of India, the biggest lender, slid 1 percent to 2,327.80 rupees. Central bank governor Duvvuri Subbarao on Oct. 27 asked lenders to keep more cash in government bonds.

Mercator Lines Ltd., Great Eastern Shipping Co. and Shipping Corp. of India Ltd., gained after the Baltic Dry Index, a measure of shipping costs for commodities, rose to a 14-month high.

Shippers Gain

Mercator, the only Indian shipping company to list shares in Singapore, climbed 7.9 percent to 61.95 rupees. Great Eastern Shipping, India’s second-biggest, added 4.7 percent to 283.45 rupees, while Shipping Corp. of India Ltd., the country’s No. 1 sea carrier, rose 3.1 percent to 150.15 rupees.

Pratibha Industries Ltd., an engineering and construction company, surged the most in more than two years after it won an order worth 2.94 billion rupees ($64 million). The shares jumped 17 percent to 259.20 rupees, its biggest advance since April 2006.

Redington (India) Ltd. gained 3.5 percent to 315.95 rupees after 2.2 percent of its equity traded in a single block on the Bombay Stock Exchange.

To contact the reporter on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net

Last Updated: November 18, 2009 06:06 EST