Economies like India, which offer relatively higher growth than the developed economies, have gain favor among investors as attractive investment destinations for foreign institutional investors (FIIs). SEBI characterize FII: Means an establishment created outside India which proposes to make interest in India in securities. An investor or investment fund that is from or registered in a country outside of the one in which it is currentlyinvesting is known as Foreign Institutional Investment and investors are known as Foreign Institutional Investors. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds. In this paper an effort has been made to develop an understanding of the investment decisions, trading strategies and behavior of the FIIs in the Indian equity market. Form this study and the findings we can conclude that FII'S are the cause for the changes in the values of majority of macroeconomic variables, rather than an effect. The FII'S flows experienced a great volatility in India. The macro economic variables namely interest rates, exchange rate, inflation rates; market position is creating an impressing influence on the foreign capital flows. The individual sectors performance is influencing the capital flows to great extent, if we compared to the macroeconomic variables.
FIIs, SEBI, Portfolio, foreign capital inflows
