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Research Article

Long-term effect of FIIs on Indian stock market

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Abstract

The Indian stock market has reacted positively and bounced back in crisis like pandemics and recession. Foreign inflows have been recorded highest among the emerging economies. Indian stock market is dominated by two major stock indices namely NIFTY-50 and Bombay Stock Exchange Sensitive Index (BSE SENSEX). This study evaluates the longterm impact of FII on the Indian stock market considering these stock exchanges. This study applies Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) for estimating the stationarity of the data. Generalized Autoregressive Conditionally Heteroscedastic (GARCH) model has been applied to measure the volatility of the stock market. The selected indices are found to be significantly influenced by FIIs.

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