Assistant Professor, Department of Commerce, Guru Nanak Khalsa College, Yamuna Nagar, India.
There are mainly two routes of Portfolio investments in India, viz., by Foreign Institutional Investors (FIIs) and through Global Depository Receipts (GDRs), American Depository Receipts (ADRs) and Foreign Currency Convertible Bonds (FCCBs). However, FIIs is the dominant constituent of the foreign portfolio investment in India. From September 14, 1992, FIIs have been permitted to invest in all the securities traded in the primary and secondary markets.
Since then, FIIs started playing a significant role in the Indian capital market. Notwithstanding its political uncertainty, infrastructure bottlenecks and bureaucratic hassles, India has emerged as an important destination for global investment. But FIIs are directly related with financial market and they are blamed to create turbulence in the market, which leads to volatility. FIIs are termed as fair-whether friends and they leave the Indian market as soon as the first sign of trouble appear in the domestic market. Therefore, it becomes quite necessary to study their investment behaviour in detail and to find out the determinants of FIIs inflow in India so as to predict their future behaviour and save the Indian Markets from unnecessary shocks. The present study uses statistical tool such as Step-wise regression and finds that BSE Sensex is the significant positive determinant of FIIs inflow in India.
Foreign portfolio Investment, Foreign Institutional Investment, Indian Stock Market, BSE Sensex, Market Capitalization, Price Earnings Ratio, Gold Prices, Crude Oil
