• Gitaben Rameshbhai Makwana

Capital is widely recognized as a pivotal driver of economic growth within any nation. In the context of developing economies such as India, the availability of domestic capital often falls short of the vast financial requirements necessary to foster growth and development. In such cases, the significance of foreign funding cannot be overstated. Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) emerge as two primary categories of foreign capital, each carrying distinct characteristics and implications for the recipient economy. FII represents a more liquid and speculative aspect of foreign capital. FII entails foreign investors trading in a country's financial markets, primarily through the purchase and sale of stocks, bonds, and other financial instruments. Unlike FDI, FII investments are characterized by shorter time horizons and the potential for rapid inflows and outflows of capital. As a consequence, FII activity exerts a direct and immediate influence on financial markets, particularly stock markets. In the Indian context, FIIs have emerged as significant and influential participants in the country's stock market. This study delves into the trends and patterns of FII flows in India, seeking to comprehend the dynamics of this critical segment of foreign capital. The study's purview spans a substantial 17-year data set, allowing for a comprehensive analysis of FII behavior and its consequences. To gauge the impact of FII on the Indian stock market, the Sensex, one of India's most widely recognized and systematically tracked stock market indices, was chosen as the focal point. The Sensex serves as a reliable benchmark for market performance and is extensively utilized by market participants, making it an ideal indicator for assessing the influence of FII on India's stock market landscape. In essence, this study endeavors to unravel the intricate relationship between FII investments and the Sensex, shedding light on how foreign institutional investors contribute to the dynamics of the Indian stock market. Through a thorough examination of historical data and trends, the study aims to provide valuable insights into the interconnectedness of foreign capital and stock market performance in the Indian context, ultimately contributing to a deeper understanding of the nation's economic landscape.

FII, Stock Market, Foreign Capital, Capital Market

"The Ripple Effect: FII's Impact on Global Financial Stability", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.10, Issue 8, page no.h348-h354, August-2023, Available :http://www.jetir.org/papers/JETIR2308738.pdf

"The Ripple Effect: FII's Impact on Global Financial Stability", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.10, Issue 8, page no. pph348-h354, August-2023, Available at : http://www.jetir.org/papers/JETIR2308738.pdf