Nifty closes off day high; United Breweries, MCX big losers

Benchmark indices closed up, but well off their intra-day highs as the trade deficit further widened in January, underscoring the continuing weakness in the economy.

The Sensex closed at 19608.08, up 47 points after slipping from an intra-day high of 19723.01. The Nifty closed at 5932.95, up 10.45 points, after touching 5,969.50 intra-day.

Shares got off to a rousing start and seemed set to maintain the momentum till the trade deficit numbers were announced. Exports rose 0.8 percent, but this was offset by a 6.1 percent increase in imports, widening the deficit for January to USD 20 billion, up from USD 17.6 billion in December.

The latest depressing data comes on the back of a lower GDP forecast for FY13, falling industrial output, and rising consumer inflation. Analysts and fund managers are now skeptical of a speedy recovery in corporate earnings, given the ground reality.

United Breweries shares fell about 9 percent to Rs 642.50 and topped the list of losers, after an SBI-led consortium of lenders decided to call in their loans to the ailing Kingfisher Airlines, part of the UB group. There is speculation that United Breweries shares could be part of promoter Vijay Mallya's personal guarantee to the lenders.

Shares of UB group flagship United Spirits shares fell around 5 percent to Rs 1862, while trading in Kingfisher Airlines shares was frozen at the lower end of the 5 percent intra-day circuit filter at Rs 10.54 after there were only sellers.

MCX was the other major loser of the day, falling over 6 percent to Rs 1200, following the tepid start to MCX-SX's equity platform.

IT shares were among the best performers of the day as investors once again got into a defensive mode. HCL Tech and Mphasis led gainers, rising about 3-4 percent.

Auto was the second best performing sector of the day even as it is set to end the current financial year on a dour note because of declining sales.

Metal, power and realty were the worst performers of the day.

Equity market gave up a lot of its gains after weakness crept in banks, real estate and metal stocks. At 2 PM, the Sensex was trading up 89.88 points at 19650.92, and the Nifty rose 25.80 points at 5948.30. Tata Motors remained tops with over 3 percent gains on the back of excellent JLR numbers. The company will declare its numbers tomorrow. Other gainers on the Nifty include HCL Tech, Bharti Airtel, TCS and IDFC.

State Bank of India fell 1.9 percent and remained the biggest loser among public sector banks. Karnataka Bank fell 5 percent . On the other hand biggies in the private sector banking space - ICICI Bank and HDFC - were up nearly 1 percent each.

The entire UB group stocks fell on news that banks will look at ways to liquidating assets pledged with them as collateral for Kingfisher loan. United Breweries crashed 9.20 percent to Rs 643.05 and United Breweries Holdings was quoting at Rs 70.25, down 9.94%. United Spirits was the most active share on the exchanges, falling 5 percent.

In the midcap space, DB Realty continues to suffer at the hands of investors following its alleged link with the CBI-Unitech fiasco. The stock fell 13 percent to Rs 87.75. Realty major DLF was also trading down over 1 percent. Other prominent midcap losers were Shasun and Suzlon.

Meanwhile, NMDC fell 1.9 percent after its third quarter numbers came in below expectations.

The Nifty was holding firm above 5950 led by technology and financials. The Nifty was up 37.40 points at 5959.90 while the Sensex was up 129.92 points at 19690.96.

Tata motors was buzzing as JLR posted a growth of more than 30% retail sales in January, supported by good volumes from Freelander and Evoque. The stock was up 2.6%.

Other top gainers on the Sensex include TCS, Bharti Airtel, HDFC and Infosys; these rose over 1% each.

Motherson Sumi was up 5% after the company's board approved a qualified institutional placement (QIP) of over 4 crore shares. The board has also okayed a preferential issue of up to 1.47 crore shares to the promoter.

Fortis, too, is reacting positively to a strong set of numbers, as its Q3 global revenues stood at Rs 540 crore, much higher than estimates. The stock gained 5%.

Meanwhile, on the losing side were Bajaj Auto, Dr Reddy's Labs, Sterlite Industries and Hindalco.

Kingfisher Airlines (down 4%) was also under pressure today after the lenders consortium finally decided to recall the Rs 7000 crore loan given to the company. Bankers say they will explore all avenues to recover their loans, including invoking Vijay Mallya's personal guarantees.

On the macro-economy front, India's exports rose an annual 0.8 percent in January and imports for the month rose 6 percent, leaving a trade deficit of USD 20 billion, a senior trade ministry official said on Wednesday.

Exports between April and January fell 4.9 percent to USD 239.7 billion

Globally, it was mixed session across Asia. While the Nikkei was down 1 %, Kospi and Straits were up nearly a percent each. But key markets like China, Hong Kong and Taiwan are shut today. In other asset classes, the euro is firm above 1.34, the dollar index is at 80. Brent crude is holding above USD 118.

Key indices were firm in early trade Wednesday even as the near term outlook on the market remains hazy in the absence of any key triggers. Brokers said there was buying interest at lower levels, but traders and money managers were wary of chasing prices.

The Sensex was at 19662, up 101 points and the Nifty at 5953, up 30 points.

Tata Motors led gainers among frontline stocks, up a little over 3 percent to Rs 308. The company will declare its third quarter numbers on Thursday. Analysts do not expect any major surprise as the company's domestic sales have been sluggish over the last quarter.

Unitech shares were up over 2 percent to Rs 29.40, ahead of its third quarter earnings later in the day. The stock had plunged 18 percent on Tuesday on allegations that the CBI prosecutor had colluded with Unitech boss Sanjay Chandra to sabotage the judicial process in the 2G scam investigation.

Opto Circuits, Pidilite, Berger Paints and Motherson Sumi were among the key gainers in the midcap space, up between 2-3 percent. Lanco Infra, MMTC and Hindustan Copper were among the laggards, down between 1-3 percent.

Broadly, auto shares were doing well, while FCMG shares were at the bottom of the heap at this hour.