Portfolio investment in India (A Study of fiis behaviour during international and domestic stress)

The Paper examines the behavior of FIIs during International and domestic stress. For the purpose of in-depth analysis several International and national events have been taken and the behavior of FIIs during these events has been diagnosed. The study has found that these events did affect the behaviour of the foreign portfolio investors. However, the analysis shows that the greatest exit by foreign investors was actually seen after the Lehman crisis of September 2008, an international event with causes beyond India's boundaries. It was further noticed that the likelihood of large scale exit by foreign investors and making domestic market highly volatile is a possibility, it is unlikely. Another important finding is that if these events have affected the behavior of FIIs, then these events did affect domestic investors’ behaviour as well.