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International Journal of Applied Research
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ISSN Print: 2394-7500, ISSN Online: 2394-5869, CODEN: IJARPF

IMPACT FACTOR (RJIF): 8.4

Vol. 2, Issue 7, Part I (2016)

Investigating relational patterns between foreign institutional investment and India stock market

Investigating relational patterns between foreign institutional investment and India stock market

Author(s)
Dr. Amandeep Batra
Abstract
In the early 1990s India faced a balance of payments crisis. This crisis was followed by an IMF structural adjustment program, economic reforms and liberalization of the trade and capital accounts. Policy makers were, however, very cautious about opening up the economy to debt flows. The experience of the Balance of Payments (BOP) crises as well as the lessons learned from other developing countries suggested that debt flows, especially short term debt flows, could lead to BOP difficulties if the country faced macroeconomic imbalances and had an inflexible exchange rate. The emphasis was, therefore, on foreign investment both foreign direct investment (FDI) and portfolio investment especially foreign institutional investment. FIIs were the first allowed in India in 1992, to invest in the primary and secondary markets. Since the time, the FIIs were allowed to enter in Indian market; India has witnessed billions of dollars as inflow and outflow. The present research work has been undertaken to know the real determinant of Foreign Institutional Investment in India and also to study the behaviour of FIIs in Indian market. There may be several determinants of FIIs flow in India like Movement of Stock exchange, Forex rate, WPI, Gold Prices etc. However the study has analyzed the association between the FIIs and BSE Sensex. The findings of statistical investigation have revealed that there is a high degree of significant positive association between FII and Sensex i.e. both the variables moves in the same directions.
Pages: 623-628  |  823 Views  65 Downloads
How to cite this article:
Dr. Amandeep Batra. Investigating relational patterns between foreign institutional investment and India stock market. Int J Appl Res 2016;2(7):623-628.
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