The dollar-denominated RTS was down 1.2 per cent following the 7.8 per cent rally, the longest since 2005, led by OGK-3, which dropped 9 per cent. Despite the losses, utilities names are one of the strongest performers of the year, up more than 40 per cent, and analysts say the fundamentals remain strong.
The capacity market remains crucial for further growth because it will provide around 50 per cent of revenues for firms, but uncertainty over a government decree on its development has made investors wary.
"Growth was not based on fundamentals but on expectation of capacity market implementation, and now there is still uncertainty related to that," said Sergey Beyden, senior utilities analyst at Metropol.
According to Beyden, while some upside remains many investors have already factored in the deal on the capacity market even though generators and consumers are yet to reach a deal.
The government originally wanted to get an agreement by the end of March, but the deadline is becoming more pressing if authorities want the market to open up next year - and any resolution could send stocks either way.
"We are seeing a correction now related to [the capacity market] but it will be complicated and will take time before it is factored in," said Beyden. "There will be a rally or correction dependent on what sort of capacity market is implemented."
The generators best placed to exploit the capacity market will have the largest upside once the decree is issued but most of the OGKs are likely to be the beneficiaries of any deal.
"OGK-2 and some other names like OGK-4 will be most exposed to this growth," said Skryabin.
However, the generators were down further on Thursday as Moscow's bourses continued ailing after US exchanges fell slightly overnight and oil dropped back by $0.90 a barrel.
The RTS was down 1.38 per cent by midday on Thursday ahead of interest rate announcements by the Bank of England and the European Central Bank, though no changes were forecast.
Meanwhile, Moscow's MICEX index is weighing up an offer for the RTS after they finish consolidating new assets, Central Bank's head of financial markets, Sergei Shvetsov, as saying on Wednesday.