FII Investment in India : A Study of Multiple Structural Breaks

In India in 1990s in its major policy shift started allowing foreign investment in its financial markets. This led to Foreign Institutional Investors (FII) gradually investing in Indian stock market and starting of a new era in Indian stock markets. Today FIIs have emerged to be one of the most dominant groups of investors with ownership of significant component of traded securities. Nevertheless flow of FII investment in Indian stock market has not remained same throughout. In this context, this paper tries to study trend of FII investment over the period of time. It also tries to find out structural changes in the investment flow of FIIs. Investigation is also done to find if multiple structural breaks are present in FII investment flow over the period of time. Study also tries to identify growth in Investment flow of FII in Indian stock market since liberalisation and it's impact on stock market return