Pragmatic Study in Environmental Ethics for Interactions and Frequency of Nifty Return, Institutional Investment of Foreign and Domestic Flows

Abstract

Indian stock market has seen a prodigious growth among the emerging economies. The Nifty 50 index has doubled from 5866 pts to 10,440 pts from 2013 to 2019.The investment decisions of both FIIs and DIIs have impact on numerous nations’ economic and political drifts. They use various tools and techniques to arrive their investment decisions and respond quickly to the market movements which make the market highly volatile. Due to trade de-regularisation, flow of foreign investments and exchange rate fluctuationsin the Indian stock exchangeshas witnesseda greater volatility. Postfinancial crisisof 2008-2009, Foreign Institutional Investment flows areconsidered as a major cause for oscillation in stock exchanges of India. The growth seen in investments byInstitutional Investorsof both foreign (FII) and domestic (DII) in the last decade hadbeen phenomenal from 709.87267 USD to 1479.89390 USD and from24, 354 Crores (323.72555 USD) to 82,595 Crores (1097.89404 USD), respectively. In this background, efforts have been made to study the interactions between purchases and sales of FII’s and DII’sand the returns of Nifty 50. Employing the Granger causality tests, it was found that there is atwo-way directionalconnection established between FII and DII. However, the study does not find any statistically significance causality by FII’s and DII’s on returns of Nifty 50 indicating that neither FII nor DII cause volatility in the returns of Nifty 50.