A Study of Net Foreign Institutional Investment in Indian Stock Market

The role of FIIs in the Indian stock market is continuously contradicted on the ground that whether these investors with their financial direct the Indian stock market and causing volatility in the Indian stock market that may destabilize the financial system of the country. FIIs with its short term nature of investment often referred to as “hot money” can have bidirectional causation in the Indian financial system with the return and risk perspective of other constituent financial markets such as money market stock market and foreign exchange market. FIIs can also exerts a good pressure on the Indian financial market in the short run that often lead to volatility and instability in the economy and financial system in the long run. As this cause of worry exists this topic has been an interesting area of studies and arguments.