Abstract:

The investment of capital that flows from one country to another country is known as foreign investment. Inflow of foreign investment is normally encouraged in the capital scarce economies because it complements and stimulates domestic investment. In India, foreign investment were allowed in 1991 either through stock market investment in listed companies referred to as Foreign Institutional Investors (FIIs) investment or directly in listed and unlisted companies referred to as Foreign Direct Investment (FDI). The objective of this paper is to study the impact of FIIs investment on the return of Indian stock market. For this purpose Pearson correlation has been applied and it is found that there is no relationship between returns of Indian stock market (BSE & NSE) and Foreign Institutional Investors cash inflows (investments).

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