An empirical study on foreign institutional investors in Indian capital market

The stock market plays a significant role in national economic growth by stimulating industry and overall development. Developed countries' stock markets tend to be more efficient than emerging markets. As one of the world's emerging economies, India is improving its stock market standards to attract foreign investment. This foreign investment helps supplement funds for domestic companies, contributing to the country's economic growth. Emerging stock markets have become attractive to foreign investors due to their high growth potential and corporate earnings, which often exceed those of developed markets. These markets are more volatile than developed ones. This study examines how FIIs affect sector-wise market returns. It also analyses FII shareholdings and their impact on BSE Sensex company market capitalisation. The study examines how FIIs/FPIs affect sector-wise market returns and the market capitalisation of selected BSE Sensex companies through their shareholding patterns. Net FII inflows, chosen indexes return, FII investments in companies, and BSE Sensex company market capitalisation are studied. They used linear regression from April 2010 to March 2021.