Trading behavior and Factors Influencing Foreign Institutional Investors in the Indian Stock Market

Dr. Madhuri Malhotra; Ms. Puja Saraf

Volume : V, Issue : XI, November - 2016

Trading behavior and Factors Influencing Foreign Institutional Investors in the Indian Stock Market

Dr. Madhuri Malhotra, Ms. Puja Saraf

Abstract :

?e Foreign Institutional Investors (FIIs) have emerged as important players in the Indian equity market in the recent past. ?is study makes an attempt to develop an understanding of the dynamics of the trading behavior and the factors influencing FIIs and returns in the Indian equity market by analyzing daily and monthly data. ?e study concludes that FIIs follow positive feedback trading on a daily basis, while they follow negative feedback trading on a monthly basis. ?e factors that affect the foreign investor�s decisions depend on a number of factors, differing for both daily and monthly data. But the main determinant remains lagged stock returns. ?e study concludes that FIIs inflows in India are determined by stock market characteristics, macroeconomic factors and international factors. JEL Code: G2, G23