Foreign Institutional Investment and its relationship with BSE Sensex and S&P CNX Nifty

Dr. Guruprasad B G; Mr. Ajay yagati; Mr. Vinaya Kumar K S

Volume : VI, Issue : I, January - 2017

Foreign Institutional Investment and its relationship with BSE Sensex and S&P CNX Nifty

Dr. Guruprasad B G, Mr. Ajay Yagati, Mr. Vinaya Kumar K S

Abstract :

Indianstock market has grown phenomenally after the financial liberalization in the year 1991, this growth has been attributed to domestic as well as foreign investments. Second phase of financial liberalization took place in 1996-97 when foreign investment restrictions were eased and easy flow of foreign funds was enabled. Both these reforms collectively increased the foreign participation in the Indian stock market. The staggering growth in the number of the FII�s post 1991, indicate the confidence and as well the financial efficacy of the Indian economic system. This study tried to understand role of foreign institutional investment and its relationship against the volatility of the major Indices such BSE Sensex and S & P CNX Nifty. Strong positive relationship between FII and major indices was observed with the study period being 2005- 2015. Analysis construe that Foreign Institutional Investments are one of the prime movers of the stock market and effect the financial health of Indian Capital Market.