Banks are under pressure. Shares of Axis Bank fell the most among largecaps in the Sensex, losing 2 percent. State Bank of India and HDFC Bank declined 0.9 percent each while their rival ICICI Bank rose 0.2 percent.

Saroj Poddar-promoted Zuari Fertilizers and Chemicals has extended his decision to wait out till February before exiting Vijay Mallya’s Mangalore Chemicals and Fertilizers, sources told CNBC-TV18. In an interview to CNBC-TV18 last month, Poddar had indicated that his deadline to exit MCF would end in December.

Zuari Fertilizers raised its stake in MCF to 16.4 percent after rival Deepak Fertilizers shored up its stake to sub 25 percent in July. In the last one year, Poddar has repeatedly said he was willing to sell Zuari’s stake in MCF to Mallya but a lack of response from the latter prompted Poddar to set a deadline after which he was free to sell the shares to the highest bidder.

Meanwhile, it is understood that Mallya, who had announced his desire to buy back the holdings of Saroj Poddar, may not have the funds to do so. Deepak Fertilizers has long been wanting to buyout the Zuari stake in MCF, and sources say, it now readying funds for the same.

On December 26, Poddar resigned from Gillette India board to comply with Securities and Exchange Board of India’s (Sebi’s) public shareholding norms. He continues to be chairman of Zuari Agro.

The board of MCX-SX would decide whether it would allow Financial Technologies to subscribe to its rights issue, MCX Vice Chairman Thomas Matthew said. MCX-SX, India’s third national stockexchange run by MCX, is looking to raise Rs 500-600 crore via the rights issue, Matthew told CNBC-TV18.

Financial Technologies, the anchor investor of MCX, is under fire for Rs 5,500 crore payment default at its subsidiary National Spot Exchange. In the wake of the scandal, commodity derivates regulator Forward Markets Commission has ordered FT to cut its stake in MCX while markets regulator Securities and Exchange Board of India has been reportedly mulling a similar decision with regards to MCX-SX. The stock exchange is owned about 90 percent by public sector banks and financial institutions, Thomas, however, said.

The sharemarket wiped out early gains amid volatility on Tuesday as investors looked cautious ahead of third quarter earnings and November industrial output data. The Sensex fell 134.13 points to 20,653.17, and the Nifty declined 41.25 points to 6,150.20, but the broader markets outperformed benchmarks.

The BSE Smallcap gained 0.3 percent as advancing shares outnumbered declining ones by a ratio of 814 to 702 on the BSE. Banks are under pressure. Shares of Axis Bank fell the most among largecaps in the Sensex, losing 3 percent. Country’s largest lenders State Bank of India , ICICI Bank and HDFC Bank dropped between 0.6-1.2 percent.