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Is the Indian Stock Market Dependent on the Flow of FDI and US $?

Abstract:

It has been seen that, changes in dollar rate will modify the returns of stock index, foreign
exchange rates and flow of FII. As the PM of India observed ³there are no strong alternative
currency other than US$ as of now1. During the recession it has been witnessed how strongly the
dollar has modified the flow of FII and Stock index. This paper investigates the nature of casual
relation between dollar, FII and stock index in India by applying the Granger Causality Test and
Multiple Regressions.

Key words: Stock Index, FII, Foreign exchange rates, recession and casual relation.

References:

Research Thesis:

Vathsala Srinivasan, Nov 1999, IISE, Bangalore, Structural changes in the Indian Foreign
Exchange market due to liberalization Measures: An Econometric Analysis,

Working Paper:

Kate Phylaktis* Fabiola Ravazzolo, STOCK PRICES AND EXCHANGE RATE DYNAMICS,
working papers, Journal of SSRN

Print Media:

„ Drops to one ±month low on market slide, Business standard, 18th Aug 2009.

„ Rises for 2nd day as stock gains may spur inflow, Business standard, 21st Aug 2009.

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SRINIDHI V.R. Dr. MANJUNATHA Prof. Venkatesh kumar
M.Com, MBA, M.phil., (Ph.D) M.Com, PGDPM, Ph.D. Head of the department ±
MBA
Lecturer in Management Selection Grade Lecturer
Acharya Institute Of
Jain University Sheshadripuram College Technology
Centre for Management Studies Bangalore Soladevanahalli
Bangalore Mob: 9449340963 Bangalore
Mob:9036940255/9845303121 Mob: 98050818542

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SRINIDHI V.R. Dr. MANJUNATHA Prof. Venkatesh kumar

M.Com, MBA, M.phil., (Ph.D) M.Com, PGDPM, Ph.D. Head of the department ±
MBA
Lecturer in Management Selection Grade Lecturer
Acharya Institute Of
Jain University Sheshadripuram College Technology
Centre for Management Studies Bangalore Soladevanahalli
Bangalore Mob: 9449340963 Bangalore
Mob:9036940255/9845303121 Mob: 98050818542