Impact of FDI and FIIs on Sensex and Nifty in India

The present paper highlights the impact of Foreign Direct investments (FDI) and Foreign Institutional Investments (FIIs) in India on BSE and NSE. The study is purely based on secondary data and the analysis of which was made through the application of Karl Pearson’s coefficient of Correlation and Multi Regression OLS model (Ordinary Least Square). Based on 15 years data starting from 2001 to 2015, it was found that the flow of FDI & FIIs was moving in cycle with Sensex and Nifty. There is a very strong positive correlation between FDI & Sensex and FDI &Nifty. There is a moderate positive correlation between FII & Sensex but the correlation is not significant between FII &Nifty. It can be concluded that the impact of flow of FDI & FIIs on Indian stock market is significant.