Today's session promises to be volatile, especially in the second half of trading as most of the demand on Wednesday seem to have come from the retail investors.There were also no sectoral drivers or themes to Wednesday's movement, with buying spread out nearly uniformly across the counters except for IT which bore the brunt of profit-booking.Another factor leading to a bleak outlook for Thursday, besides the stretched, all-time-high valuations, is the failure of the bulls to successfully breach the 12,000 mark on Wednesday.The second half of the trading on Wednesday saw the Sensex plunge nearly 185 points from the day's high it had set in the morning trade. The volatility kept increasing and the indices showed no signs of settling down before the day's trading came to an end, keeping alive the prospects of continued fluctuations, with a downward bend, on Thursday as well.Market breadth, which measures the proportion of gaining stocks to losing stocks, was also negative on Wednesday for the first time since the beginning of the move up three days ago. Causing more concern, the breadth continuously declined throughout the day.Another factor in favour of the bears on Thursday is the large-cap bias for the meagre gains made on Wednesday. Among large buyers, both the FIIs and to some extent the mutual funds seem to have become more cautious.While FIIs continued to sell equity for the sixth day on Wednesday, mutual funds too seemed to have cut their fresh investments into the market, according to both SEBI figures and dealer-reports.The markets are however, not likely to go in for a drastic correction today as the mutual funds are still reported to be sitting on cash which they need to deploy. As such, any major correction is likely to be followed by buying from the institutional side.
