Reversing a four-session losing run, equity benchmarks of Bombay Stock Exchange and National Stock Exchange posted gains on short covering and bargain hunt by investors bucking the mixed trends in other Asian markets and negative start to Europe’s exchanges on Tuesday.

But late in the afternoon trade gains were trimmed under brief profit booking. Analysts say a spell of short covering was overdue in “over sold” market regardless of continuing disruption in Parliament’s business for more than 11 days.

Analysts say the markets are less concerned about the no-trust motion that the government is ready to face in the Lower House as much than about the passage of pending bills.

Global markets are looking forward to the outcome of meeting of the US Federal Reserve scheduled for late Tuesday that is likely to act on proposed interest rate increase in 2018.

The first quarter of the 2018 calendar year has so far been painful for market participants, say analysts, since in less than two months Dalal Street saw massive erosion in investors wealth as BSE’s bellwether 30-share Sensitive Index lost 3,633.12 points at Tuesday’s intra-day low of 32,810.86 points from its record high of 36,443.98 points.

The broader market’s 50-scrip Nifty of NSE crumbled 1,122.45 points from a 11,171.55 point high on 29 January. Analysts say the sell-off in February post Budget 2018-19 presentation in Parliament was mainly triggered by long term capital gain or LTCG Tax that now takes effect on 1 April.

Apparently, foreign portfolio investors or FPIs unwinded their long positions in February (net sale `18,619.15 crore) as they strategically turned buyers in March, say analysts. Domestic mutual funds too booked profits as they work on re-allocation of funds across sectors once LTCG Tax comes into force.

Data updated till Monday suggests FPIs in March bought stocks of Rs 6,541,57 crore including `292.23 crore on Monday despite Sensex and Nifty ending with deep cuts.

DIIs or domestic mutual funds sold `191.52 crore shares on Monday. Sensex closed for the day 0.22 per cent up at 32,996.76 (+73.64) points. Nifty gained 0.30 per cent to end 10,124.35 (+30)points.

Bank Nifty settled at 24,168.20 (-76.90) points losing 0.32 per cent and Nifty PSU Bank was 0.34 per cent up to close 2,864.45 (+9.65) points. State run banks continue to have a bad run with frequent discomforting disclosures coming to light. On Tuesday it was Canara Bank’s turn.

Its stock cracked 5 per cent to Rs 251 on reports of the Central Bureau of Investigation booking its former CMD RK Dubey on charges of alleged graft for favouring a private borrower who turned defaulter or “defrauded” the bank of ` 68 crore within just 12 months of borrowing the money as working capital.

Analysts, however, see better days post 1 April when Q4 ( January-March) earning data start coming which most polls suggest would be an improvement over the past three quarters.

They based their assumption on improving fundamentals such as IIP or index of industrial production, softened consumer price index linked inflation and GDP projections by IMB and the World bank.

Commenting on the market’s status in 2018 so far, Abhay Laijawala of Deutsche Equities India told business media that the fall in the market started with global cues (especially bond yields) and the domestic cues came into play later.

The expectations of what is happening in the bond markets had impacted sentiment. But the economy is improving and capacity utilisation across sectors is very high.

“It has to be seen how this inter-play between fundamental and sentiment works out.” The analyst with the German bank expects earnings at 20 per cent and valuations de-rating by 10 per cent. Analysts are surprised to note valuations largely on higher side despite steep decline in the sell-off.

In the Sensex 20 shares were up, ten down and one unchanged. For Nifty it was 33:16:1.

Top gainers in BSE benchmark included Tata Steel Rs 594.20, 3.33 per cent; Sun Pharma ` 509, 2.23 per cent; Infy Rs 1,166.50, 1.09 per cent; and SBI Rs 250, 0.77 per cent. Major losers were ICICI Bank ` 292, -1.02 per cent; and Yes Bank `303, -0.61 per cent.