• Dr. R. Kanagaraj

Since India's economic liberalization in 1991, foreign investors have played a growing role in shaping the Indian stock market, entering primarily through Foreign Direct Investment (long-term) and Foreign Institutional/Portfolio Investment (short-term, market-driven). Foreign Institutional Investors (FIIs) have emerged as major contributors to market growth, with their capital inflows driving up share prices and boosting investor confidence, aided by India's strong economic stability and growth potential relative to other developing nations. However, this reliance on foreign capital has a downside: since FIIs are highly responsive to both domestic and global conditions, any large-scale withdrawal of their investments can trigger sell-offs and increase market volatility. Adding to this dynamic, retail investors—many of whom lack deep market knowledge—often mimic FII trading patterns, investing in the same stocks FIIs favor. This tendency amplifies the market's dependence on foreign investment behavior, making the Indian stock market's health closely, and sometimes riskily, tied to FII activity.

Stock Market, Foreign portfolio investors, SEBI, NSE, BSE

"Impact of FII’s on Indian Stock Exchange: Special Reference to BSE & NSE", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.13, Issue 9, page no.b764-b772, September-2026, Available :http://www.jetir.org/papers/JETIR2609184.pdf

"Impact of FII’s on Indian Stock Exchange: Special Reference to BSE & NSE", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.13, Issue 9, page no. ppb764-b772, September-2026, Available at : http://www.jetir.org/papers/JETIR2609184.pdf