The Role of FDI in the Development of the Indian Stock Market

Abstract

Abstract: With the extreme advancement in the Foreign Direct Speculation (FDI) system during past years, Indian capital market has had the option to pull in unfamiliar speculators impressively. There has been critical upsurge in the unfamiliar direct interest in India. With this, India has arisen as quite possibly the most preferred objective for interest on the planet. Since the turn of events and the unpredictability of the Indian financial exchange has been generously affected by the inflow of FDI. Consequently, the current paper Endeavor to dissect the effect of FDI inflows on the development of BSE (Bombay Stock Trade) SENSEX and NSE (National stock trade) CNX Nifty during the time frame under investigation. The examination is basically founded on ten long time optional information for the time frame from April 2006 to March 2016. The Simple Linear Regression (stepwise strategy), Karl Pearson's coefficient of relationship, Analysis of Variance, Normal P- P plot, disperse plot, Histogram, spellbinding measurements (Mean and Standard Deviation), Compounded Annual Growth Rate, Trend Percentage and so on are the devices for the examination of information utilizing the factual bundle for sociologies (SPSS). FDI was found altogether connected with both the business sectors with the coefficient of relationship being 0.666 what's more, 0.682 separately. It was additionally discovered that FDI has influenced BSE SENSEX up to 44 percent and CNX Nifty up to 47 percent. The study inferred that progression of FDI in India has critical effect on BSE SENSEX and NSE Nifty developments. Keeping in view the discoveries of the examination, it has been proposed that the public authority of India alongside its executing bodies should attempt to pull in additional furthermore, more FDI for the smooth and fast advancement of the stock market and the economy in general. Keywords: Regression, Correlation, Indian Stock Market, Stock market development, BSE Sensex, NSE-Nifty, FDI