The market is likely to be volatile with an upward bias today as mutual funds seem to have stepped into the shoes of the FIIs as the main market-driver.On Thursday, local funds pumped in nearly Rs 521.52 crore, their second highest investment in more than four months. Going by the indications, they were also the main buyers today as the FIIs purchased equity worth just over Rs 90 crore, woefully inadequate to explain the 1.5-2.7% gain in major indices yesterday.The aggressive maneuver seems to stumped the foreign institutional investors, most of whom had been intent on booking their profits for the last four trading days.For the retail investor, the current move may come as a blessing as it is likely to prolong the market slide or even push it up in the short-term.Though it would be wrong to draw long-term conclusions in a dynamic market, the current upswing may be seized on as good opportunity to convert to cash, especially as some of the day's sharp rise was caused by the unwinding of short positions by operators who had speculated on further decline in stock prices.Interestingly, Thursday was also the first time the funds have whole-heartedly invested in the market this month, with the previous high being a mere Rs 281 crore on the seventh of this month.For most part of the rally, the Indian mutual funds had preferred to wait on the sidelines and watch as the Sensex broke away from its previous highs late last year.For the first three months of this year, they were net sellers of equity and started deploying their cash only on March 1. Since then, they have invested nearly Rs 4,500 crore in March alone, followed by exactly Rs 1,000 crores this month till Thursday, though more than half of that came on the last day itself.Though bullish in the extreme short-term, the long-term prospects of the market will be determined only after the strategy of foreign funds is known. They have invested nearly 50,000 crores into the spot market over the last 12 months and have withdrawn nearly 2,800 crores over the last five trading days.
