Indian Stock Market and FIIs Investments – A Causality Study

With small beginnings in the early nineteenth century, Indian stock market has risen to great heights. The Government of India has formulated various policies to encourage the flow of foreign capital into India. The Indian stock market has witnessing an increasing participation of foreign institutional investors, which assumed to have steadily controlling the investment scenario of the stock market. The impact of huge capital flows by them in the Indian stock market has taken the attention of the policy makers and economists during the last decade. The present paper is an attempt to analyze the casual relationship (both long run and short run) between Indian Stock Market and FIIs investments.