Foreign institutional investors: It's impact on Indian stock market volatility Usmani Faisal1, Ghayas Atif2 1Department of Business Administration, AMU, Aligarh, India, Email: faisal.m.usmani@gmail.com 2Department of Business Administration, AMU, Aligarh, India Email: atifghayas91@gmail.com Online published on 20 September, 2018. Abstract Post-financial liberalization in India, foreign institutional investors began investing in Indian Stock market. Foreign institutional investors had ponderous commencement in Indian stock market. Later on, they have grown in leaps and bounds in last two decades. Foreign Investors have brought with them many benefits like enhanced flow of foreign capital, better corporate governance and improved capital market. This study chooses National stock exchange to represent the Indian stock market. 5 year monthly data was collected from April 2012 to March 2017. Monthly stock market returns were taken for this period and the impact of FIIs was on the returns were analysed. The study employs correlation analysis to examine the relationship between FIIs investment and selected stock market returns. Further, GARCH model has been used to examine the volatile influence of FIIs on stock returns. The findings reveals that FIIs are not the only deciding factor for volatility in returns; there may be various other factors also. However, FII is also a major factor that influences the above relationship. Top Keywords Foreign Institutional Investors, Volatility, Market return, Indian capital Market, Augmented Dickey-fuller test, GARCH. Top |