From Chance to Change: Adventitious Investors and Market Dynamics in India

DOI: https://doie.org/10.10399/APER.2025115356

Authors:

Gourav Mittal, Dr. Sonu Dalal, Vinod Kumar, Dr. Raghav Jain

Keywords:

Foreign Investors, Nifty Indices, Stock Market, VAR Model.

Abstract:

The study aims to investigate the association between FII and Nifty indices. The weekly data from January 15, 2010, to September 15, 2025, is used and analysed using Vector Autoregression (VAR) and the Granger Causality test. NSE was selected in the study because of its most systematic stock market indices, and is widely used for benchmarking by market participants. The results show that foreign institutional investors significantly influence the Nifty indices and the combined effect of both variables also influences the Nifty index. Additionally, the findings of Granger causality show that NFII and Bank Index and NFII and Service Sector have unidirectional causality, whereas NFII and India Consumption have directional causality. The results indicate that the money-related financial experts ought to consider the modifications in the net flow of FII to the Indian Stock Market prior to contributing.

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