Report

On
Foreign Direct investment and Foreign institutional investment and its impact on stock
market
And exchange rate
Submitted to
DR. Hiteksha Joshi
Faculty of Management
Submitted by
ENROLLMENT NO NAME
202100620010001 Rakesh Agrawal
202100620010179 Deep Manwani
202100620010251 Kashvi Shah
202100620010166 Karishma Mahajan
202100620010337 Meet Kataria
202100620010115 Sanjana Bhandari
202100620010340 Vishal Lohana
202100620010382 Ram Chandarana
 FDI (FOREIGN DIRECT INVESTMENT)
MEANING
A foreign direct investment (FDI) is an investment in the form of a controlling
ownership in a business in one country by an entity based in another country It is thus
distinguished from a foreign portfolio investment by a notion of direct control.

Foreign Direct Investment (FDI) is a critical driver of economic growth. FDI Equity Inflow is
a major source of non-debt financial resource for the economic development of India.

India has emerged as the preferred destination for many foreign international enterprises due
to constructive factors such as high economic growth, fast population growth, English
speaking people, relatively lower wages and special investment privileges such as tax
exemptions, etc.

Thus, the Indian government’s favourable policy regime and robust business environment
have ensured that foreign capital keeps flowing into the country.
 FII
A foreign institutional investor (FII) is an investor or investment fund investing in a country
outside of the one in which it is registered or headquartered. The term foreign institutional
investor is probably most commonly used in India.
India was the third biggest gainer in equity among emerging markets. South Korea's Kospi
topped the list with 30 percent gains and Taiwan 22 percent.

During FY22, FIIs sold ₹1.40 lakh crore in equities compared to last year when it was a net
buyer of ₹2.74 lakh crore.

Meanwhile, DIIs were net buyers of ₹1.26 lakh crore in first eleven months of FY22
compared to net net sale of ₹39,000 crore last year.

Indian equity markets have faced a myriad of challenges in the financial year that just ended
(FY22), but it not only managed to survive, but thrive throughout the journey.

Markets were resilient despite foreign institutional investors (FIIs) selling a huge number of
equities i.e., ₹1.40 lakh crore in FY22 compared to last year when it was a net buyer of ₹2.74
lakh crore. Since January 2022 till date, it has sold ₹10.13 lakh crore in Indian equities.

All this because of the unexpected pandemic that hit the country badly followed by another
event that escalated inflation in the country -- Russia-Ukraine war -- and most importantly
because of monetary tightening in the US, which makes the US debt market more attractive
to FIIs. And hence the huge sell-off.

Apparently, this is one of the worst outflows from India by FIIs in many years.
Despite this, Indian markets outperformed global peers including the US and UK during the
financial year as Nifty 50 surged 19%.

DIFFERENCES BETWEEN FDI & FII

BASIS FOR
FDI FII
COMPARISON

Meaning When a company situated in one FII is when foreign companies

 BASIS FOR
FDI FII
COMPARISON

country makes an investment in a make investments in the stock

company situated abroad, it is known market of a country.
as FDI.

Entry and Exit Difficult Easy

What it brings? Long term capital Long/Short term capital

Transfer of Funds, resources, technology, Funds only.

strategies, know-how etc.

Economic Growth Yes No

Consequences Increase in country's Gross Domestic Increase in capital of the

Product (GDP). country.

Target Specific Company No such target, investment

flows into the financial market.

Control over a Yes No

company

WHAT WAY IT WILL IMPACT INDIAN ECONOMY?

FDI’s IMPACT ON INDIAN ECONOMY:

Foreign Direct Investment (FDI) leads to the long-term growth of the economy.  MNCs bring
about technology transfer to the domestic companies. Organic growth or expansion takes place
in the companies. Employment too rises. 

FDI strengthens the balance sheet as it raises the assets of the companies. Profits of the
businesses increase and labour productivity too increases. 
Per capita income increases and consumption improves. Tax revenues increase and government
spending rises.

GDP increases and there is also a lagged effect due to which subsequent years GDP too
increases. 

FDI also acts as a solid complement to domestic stock of investment which is low (about 32%)
in India because of low savings. This investment raises competitiveness among the businesses,
breeds innovation and efficiency and increases standard of living through better products and
services in the market. 

Exports get a fillip and balance of payments show surplus which causes rupee to appreciate vis a
vis the Dollar. Forex reserves rises significantly and this causes RBI ‘s assets to increase due to
which money supply rises.

Because of FDI, there is solid growth in the companies and hence stock market rallies and
attracts more capital which raises more funds for the businesses. 

In FDI there is technology transfer or the movement of technical know-how to the domestic
country due to which skill development takes place and together with higher capital this raises
productivity and profitability. 

Total FDI inflows in the country in the last 20 years (April 2000 – September 2020) are $729.8
bn while the total FDI inflows received in the last 5 years (April 2014- September 2019) was
$319 bn which amounts to nearly 50% of total FDI inflow in last 20 years.

In this huge investment scenario let us see, the top 5 Indian states according to FDI destinations

FII’s IMPACT ON INDIAN ECONOMY:

Foreign Institutional Investments (FIIs) definitely boost the Indian economy. Over the years,
emerging markets, including India, have become hot investment destinations for foreign
institutional investors because of their huge growth potential. The Securities and Exchange
Board of India has more than 1400 foreign institutional investors registered with it and this
figure is likely to increase in the next few years. Institutions involved in FIIs are mutual
funds, hedge funds, pension funds, university funds, foundations, endowments, charitable
societies, and insurance companies. 
 
FIIs have a huge impact on the Indian economy – a sudden influx of FII can essentially drive
the stock market. In fact, a large part of the 25% (plus) rally in Sensex in 2012 can be
attributed to the Rs 1.23 trillion (US$ 20 billion) of inflow from FIIs. Additionally, FIIs
lower the cost of capital and provide access to cheap global credit. 
 
Recently, reports surfaced that after a reduction in the bond buying program by the US
Federal Reserve, India witnessed a sharp decline in the Indian equities by over Rs 2,000
crores. In fact, after the US Federal Reserve made this announcement, foreign investors
withdrew Rs 2,000 crores from Indian equities within a fortnight.

If FII inflows slow down, it will reduce the wealth generated by the stock market and we will
witness the depreciation of the Indian currency. In addition, the Reserve Bank of India would
have to increase interest rates to prevent huge swings in the exchange rate. As such,
companies that are unable to fund their growth internally will go into losses and this will
eventually hinder the growth rate of the Indian economy.

FII inflows have grown in importance over the last few years not only in India but other
emerging markets too. On February 17, 2014, Finance Minister P Chidambaram announced a
ten-point agenda to make India the third largest economy in the world by 2043, behind the
US and China, and in one of the points, he stressed the importance of FIIs in the Indian
economy. At present, India’s current account deficit is high and it will take a few years for
this value to decrease significantly.
 
India’s current account deficit can be financed only by foreign investments, which is why the
Indian government is coming up with ways to increase FIIs. The government and industry
experts are confident that India will attract more FIIs in future, and this will in turn boost the
economy of the country significantly
 Date FDI
CURRENCY RATE
FII cash segment INFLOW % Change in nifty
Jan-16 ₹ -14,356.01 ₹ 33,461.00 ₹ 67.85 -4.82%
Feb-16 ₹ -12,513.00 ₹ 21,268.00 ₹ 68.25 -7.62%
Mar-16 ₹ 23,049.00 ₹ 16,530.00 ₹ 66.26 10.75%
Apr-16 ₹ 3,056.51 ₹ 22,345.00 ₹ 66.35 1.44%
May-16 ₹ -186.58 ₹ 13,271.00 ₹ 67.11 3.95%
Jun-16 ₹ 3,975.95 ₹ 15,111.00 ₹ 67.53 1.56%
Jul-16 ₹ 10,122.69 ₹ 27,430.00 ₹ 66.74 4.23%
Aug-16 ₹ 8,778.27 ₹ 32,150.00 ₹ 66.96 1.71%
Sep-16 ₹ 3,329.62 ₹ 34,366.00 ₹ 66.59 -1.99%
Oct-16 ₹ -5,770.19 ₹ 41,353.00 ₹ 66.79 0.17%
Nov-16 ₹ -19,982.37 ₹ 31,631.00 ₹ 68.52 -4.65%
Dec-16 ₹ -11,325.28 ₹ 22,727.00 ₹ 67.85 -0.47%

.
SUMMARY OUTPUT CURRENCY
SUMMARY OUTPUT currency
Regression Statistics  
Multiple R 0.88215817
R Square 0.77820304
Adjusted R Square 0.72891482
Standard Error 0.39166091
Observations 12

ANOVA          
  df SS MS F Significance F
Regression 2 4.843957 2.421979 15.78883 0.001139725
Residual 9 1.380584 0.153398    
Total 11 6.224541      

Coeffici Standard P- Lower Upper Lower Upper

  ents Error t Stat value 95% 95% 95.0% 95.0%
67.8129 177.0 2.97E- 66.94661 68.679 66.9466 68.6792
Intercept 435 0.382965 736 17 717 27 2 7
- - -
fii cash 5.7136E 5.618 0.000 8.01411E -3.4E-
segment -05 1.02E-05 36 327 -05 05 -8E-05 -3.4E-05
- - -
fdi 2.4524E 1.725 0.118 5.66688E 7.62E-
INFLOW -05 1.42E-05 86 453 -05 06 -5.7E-05 7.62E-06
INTERPRETATION

As a significant value of FII IS less than 0.05 which indicate that FII Have impact on
exchange rates the relationship is positive. but in the case of FDI inflow significant value is
more than 0.05 so we will accept null hypothesis which indicate that FDI inflow have no
impact on Exchange rate

SUMMARY OUTPUT OF NIFTY

SUMMARY OUTPUT nifty

Regression Statistics  
Multiple R 0.88289624
R Square 0.77950577
Adjusted R Square 0.73050706
Standard Error 0.02534054
Observations 12

ANOVA
  df SS MS F Significance F
0.02043 0.01021 15.908
Regression 2 1 6 7 0.001109909
0.00577 0.00064
Residual 9 9 2    
0.02621
Total 11 1      

Coeffici Standard P- Lower Upper Lower Upper

  ents Error t Stat value 95% 95% 95.0% 95.0%
-
0.02809 1.133 0.286 0.027960 0.0841 0.08414
Intercept 097 0.024778 711 211 524 42 -0.02796 2
fii cash 3.274E- 4.975 0.000 1.7856E- 4.76E-
segment 06 6.58E-07 954 764 06 06 1.79E-06 4.76E-06
- - -
fdi 8.2077E 0.892 0.395 2.90055E 1.26E-
INFLOW -07 9.19E-07 75 235 -06 06 -2.9E-06 1.26E-06

INTERPRETATION

AS a significant value is less than 0.05 in the case of FII which indicate that FII have impact o
Nifty performance the relationship is positive if FII inflow increase nifty will also increase but
in the case of FDI significant value is more than 0.05 which indicate that FDI inflow have no
Impact on NIFTY performance
 fii cash fdi INFLOW currency rate
DATE  segment % Change in nifty
Jan-17 OUTPUT NIFTY
SUMMARY 1582.18 2767.00 67.45 4.59%
Feb-17 8704 8118.00 66.67 3.72%
Mar-17 26473.17Statistics 16126.00
Regression   64.86 3.31%
Apr-17
Multiple R -6627 20826.00 64.36 0.571441 1.42%
May-17
R Square -452.24 26159.00 64.51 0.326545 3.41%
Jun-17R Square
Adjusted -3759 20101.00 64.63 0.176889 -1.04%
Jul-17Error
Standard 1464.85 31112.00 64.12 0.025106 5.84%
Aug-17
Observations -15995 51198.00 63.94 12 -1.58%
Sep-17 -23969 13632.00 65.31 -1.30%
Oct-17 -7826.53 17454.00 64.76 5.59%
Nov-17 -13515 2019.00 64.47 -1.05%
Dec-17 -6411.57 30956.00 63.88 2.97%
ANOVA
Significance
  df SS MS F F
Regression 2 0.002751 0.001375 2.181962 0.168806
Residual 9 0.005673 0.00063    
Total 11 0.008424      

Coeffici Standard P- Lower Upper Lower Upper

  ents Error t Stat value 95% 95% 95.0% 95.0%
-
2.001 0.076 0.0034 0.0562
Intercept 0.02643 0.013203 841 326 4 96 -0.00344 0.056296
fii cash 1.22E- 2.035 0.072 -1.4E- 2.58E-
segment 06 6E-07 052 341 07 06 -1.4E-07 2.58E-06
-
fdi 0.067 0.947 -1.3E- 1.23E-
INFLOW -3.8E-08 5.61E-07 46 691 06 06 -1.3E-06 1.23E-06

interpretation
As significant value is more than 0.05 in the both the cases so we can conclude that FDI
investment and FII inflow have no impact on Nifty performance

SUMMARY OUTPUT currency

Regression Statistics  
Multiple R 0.694
R Square 0.481636
Adjusted R Square 0.366444
Standard Error 0.86925
Observations 12
 ANOVA

  df SS MS F Significance F

Regression 2 6.318519 3.15926 4.181156 0.051983

Residual 9 6.800353 0.755595    

Total 11 13.11887      
Coefficien Standard Lower Upper Lower Upper
  ts Error t Stat P-value 95% 95% 95.0% 95.0%
144.364 1.87E- 64.9562 67.0243 64.9562 67.0243
Intercept 65.99029 0.457108 8 16 4 4 4 4
fii cash 0.58380 0.57369 -3.5E- 5.91E- -3.5E- 5.91E-
segment 1.21E-05 2.08E-05 3 1 05 05 05 05
fdi - 0.02583 -9.6E- -7.8E- -9.6E- -7.8E-
INFLOW -5.2E-05 1.94E-05 2.66491 7 05 06 05 06

interpretation

AS a significant value is less than 0.05 so we can conclude that FDI INFLOW have impact
on exchange rate. if FDI inflow decrease then exchange rate will increase but in the case of
FII significant value is more than 0.05 we will accept null hypothesis so we can conclude that
FII inflow have no impact on exchange rates

fdi INFLOW currency rate

  fii cash segment % Change in nifty
Jan-18 9568 15386.00 63.58 4.72%
Feb-18 -18619 20478.00 65.21 -4.85%
Mar-18 7904.85 21569.00 65.13 -3.61%
Apr-18 -9525.38 35104.00 66.51 6.19%
May-18 -12359.7 30479.00 67.41 -0.03%
Jun-18 -10249 19597.00 68.51 -0.20%
Jul-18 -3973.87 1925.00 68.54 5.99%
Aug-18 -2228.53 17441.00 71.01 2.85%
Sep-18 -9468.88 33472.00 72.50 -6.42%
 Oct-18 -29.201 34595.00 73.96 -4.98%
Nov-18 5282 12495.00 69.62 4.72%
Dec-18 1103.87 3156.00 69.95 -0.13%

SUMMARY OUTPUT currency

Regression Statistics  
Multiple R 0.17455
R Square 0.030468
Adjusted R Square -0.18498
Standard Error 3.394316
Observations 12

ANOVA
  df SS MS F Significance F
Regression 2 3.258556 1.629278 0.141413 0.870022
Residual 9 103.6924 11.52138    
Total 11 106.951      

Coefficien Standar Lower Upper Lower Upper

  ts d Error t Stat P-value 95% 95% 95.0% 95.0%
2.10208 32.1153 1.35E- 62.7539 72.2643 62.7539 72.2643
Intercept 67.50915 1 8 10 1 8 1 8
fii cash 0.00012 0.97979 - 0.00028 - 0.00028
segment 3.28E-06 6 0.02604 3 0.00028 8 0.00028 8
9.65E- 0.50414 0.62626 - 0.00026 - 0.00026
fdi INFLOW 4.86E-05 05 9 6 0.00017 7 0.00017 7

interpretation

As significant value is more than 0.05 in both the cases, we can conclude that FII inflow and
FDI investment have no impact on exchange rates

SUMMARY OUTPUT nifty

Regression
Statistics  
0.45076
Multiple R 5
0.20318
R Square 9
 Adjusted R
Square 0.02612
0.04492
Standard Error 9
Observations 12

ANOVA
  df SS MS F Significance F
Regression 2 0.004633 0.002316 1.147516 0.35983
Residual 9 0.018167 0.002019    
Total 11 0.0228      

Coefficien Standar Lower Upper Lower Upper

  ts d Error t Stat P-value 95% 95% 95.0% 95.0%
0.02782 1.34222 0.21239 0.10028 0.10028
Intercept 0.037346 4 1 9 -0.0256 8 -0.0256 8
fii cash 1.67E- 0.43138 0.67633 -3.1E- 4.49E- -3.1E- 4.49E-
segment 7.19E-07 06 5 7 06 06 06 06
1.28E- -4.4E- 1.36E- -4.4E- 1.36E-
fdi INFLOW -1.5E-06 06 -1.1952 0.26255 06 06 06 06

interpretation
As significant value is more than 0.05 in both the cases, we can conclude that FII inflow and FDI
investment have no impact on Nifty performance

fii cash fdi % Change in

currency rate
INFLOW
  segment nifty
Jan-19 127.67 31181.00 70.96 -0.29%
Feb-19 13564.57 20404.00 70.86 -0.36%
Mar-19 32371 25019.00 69.17 7.70%
Apr-19 12749 36463.00 69.71 1.07%
May-19 -2136 26481.00 69.65 1.49%
Jun-19 -688.5 50567.00 68.95 -1.12%
Jul-19 -16870 30774.00 68.84 -5.69%
Aug-19 -14828 18164.00 71.46 -0.85%
Sep-19 -6624 19551.00 70.62 4.09%
Oct-19 8595 22808.00 71.02 3.51%
Nov-19 12924 20036.00 71.70 1.50%
Dec-19 694.12 33166.00 71.39 0.93%
 SUMMARY OUTPUT nifty

Regression Statistics  
Multiple R 0.757488746
R Square 0.5737892
Adjusted R Square 0.479075689
Standard Error 0.023581467
Observations 12

ANOVA
Significance
  df SS MS F F
Regression 2 0.006738 0.003369 6.058156 0.021543
Residual 9 0.005005 0.000556    
Total 11 0.011742      
Standar Lower Upper Lower Upper
  Coefficients d Error t Stat P-value 95% 95% 95.0% 95.0%
- -
0.03117060 0.02257 0.20068 0.019 0.0822 0.019 0.0822
Intercept 9 5 1.38073 2 9 4 9 4
fii cash 1.64855E- 5.21E- 3.16414 0.01147 4.7E- 2.83E- 4.7E- 2.83E-
segment 06 07 8 3 07 06 07 06
-9.56295E- 7.66E- - 0.24310 -2.7E- 7.75E- -2.7E- 7.75E-
fdi INFLOW 07 07 1.24919 7 06 07 06 07

Interpretation
As significant values are less than 0.05 in the case of FII inflow which indicate that FII inflow
have impact on nifty performance the relationship is positive if fii inflow increase then nifty
will also increase but in the case of FDI investment significant value is more than 0.05 which
indicate that FDI investment have no impact on Nifty performance

SUMMARY OUTPUT currency

Regression Statistics  
Multiple R 0.576836595
R Square 0.332740457
Adjusted R Square 0.184460558
Standard Error 0.93469969
Observations 12
 ANOVA
Significanc
  df SS MS F eF
Regression 2 3.921006 1.960503 2.244002 0.16193
Residual 9 7.862972 0.873664    
Total 11 11.78398      
Standa
Coefficien rd P- Lower Upper Lower Upper
  ts Error t Stat value 95% 95% 95.0% 95.0%
72.16604 0.8948 80.648 3.51E- 70.141 74.190 70.141 74.190
Intercept 872 25 26 14 81 28 81 28
-
5.78451E- 2.07E- - 0.7857 -5.3E- 4.09E- -5.3E- 4.09E-
fii cash segment 06 05 0.2801 29 05 05 05 05
- - - -
6.41258E- 3.03E- 2.1133 0.0637 0.0001 4.52E- 0.0001 4.52E-
fdi INFLOW 05 05 3 24 3 06 3 06

INTERPRETATION
As significant value is more than 0.05 in both the cases, we can conclude that FII inflow and
FDI investment have no impact on Exchange rates
 fdi INFLOW currency rate % Change in
DATE  fii cash segment nifty
Jan-20 -5412 39719.00 71.56 -1.70%
Feb-20 -12684 24025.00 72.57 -6.36%
Mar-20 -65.816 31804.00 75.39 -23.25%
Apr-20 -5209 21133.00 75.05 14.68%
May-20 13178 16851.00 75.06 -2.84%
Jun-20 5492.95 11736.00 75.52 7.53%
Jul-20 2490 22866.00 74.92 7.49%
Aug-20 15749 130576.00 73.16 2.84%
Sep-20 -11410 21350.00 73.55 -1.23%
Oct-20 14537 39160.00 74.61 3.51%
Nov-20 65238 63196.00 74.00 11.39%
Dec-20 48223 56086.00 73.07 7.81%

SUMMARY OUTPUT nifty

Regression Statistics  
Multiple R 0.409062
R Square 0.167332
Adjusted R Square -0.01771
Standard Error 0.100881
Observations 12
ANOVA
Significan
  df SS MS F ce F
Regressio 0.01840 0.00920 0.90431
n 2 6 3 4 0.438656
0.09159 0.01017
Residual 9 3 7    
Total 11 0.11      

Coefficien Standar Lower Upper Lower Upper

  ts d Error t Stat P-value 95% 95% 95.0% 95.0%
- -
0.12849 0.90058 0.1010 0.11324 0.1010 0.11324
Intercept 0.006087 0.04737 3 5 7 5 7 5
fii cash 1.43E- 1.29114 0.22882 -1.4E- 5.07E- -1.4E- 5.07E-
segment 1.84E-06 06 7 8 06 06 06 06
1.04E- - 0.82362 -2.6E- 2.11E- -2.6E- 2.11E-
fdi INFLOW -2.4E-07 06 0.22948 4 06 06 06 06

interpretation
As significant value is more than 0.05 in both the cases, we can conclude that FII inflow and
FDI investment have no impact on Nifty performance

SUMMARY OUTPUT currency

Regression Statistics  
Multiple R 0.430476
R Square 0.185309
Adjusted R Square 0.004267
Standard Error 1.25681
Observations 12

ANOVA
Significan
  df SS MS F ce F
Regressi 1.02356
on 2 3.2336 1.6168 8 0.397619
14.2161 1.57957
Residual 9 5 2    
17.4497
Total 11 5      

Coefficien Standar Lower Upper Lower Upper

  ts d Error t Stat P-value 95% 95% 95.0% 95.0%
0.59015 6.12E- 75.9885 73.3185 75.9885
Intercept 74.65356 2 126.499 16 73.31854 8 4 8
fii cash 1.78E- 0.64264 0.53648 5.17E- -2.9E- 5.17E-
segment 1.14E-05 05 4 1 -2.9E-05 05 05 05
fdi 0.18630 1.08E- -4.8E- 1.08E-
INFLOW -1.9E-05 1.3E-05 -1.4307 6 -4.8E-05 05 05 05

INTERPRETATION

As significant value is more than 0.05 in both the cases, we can conclude that FII inflow
FDI investment have no impact on exchange rates
 fdi INFLOW currency rate % Change in
  fii cash segment nifty
Jan-21 8980 19790.00 72.83 -2.48%
Feb-21 42044 18822.00 73.94 6.56%
Mar-21 1245.22 20903.00 73.15 1.11%
Apr-21 -12692 33064.00 73.99 -0.41%
May-21 -6015 76652.00 72.42 6.50%
Jun-21 -25.89 19603.00 74.35 0.89%
Jul-21 -23193 21231.00 74.34 0.26%
Aug-21 -2568 46236.00 72.93 8.69%
Sep-21 463.77 33143.00 74.18 2.84%
Oct-21 -25572.19 27884.00 74.97 0.30%
Nov-21 -39901 32703.00 75.17 -3.90%
Dec-21 -35493 29480.00 74.35 2.18%

Summary output CURRENCY

Regression Statistics  
Multiple R 0.74347
R Square 0.552747
Adjusted R Square 0.453357
Standard Error 0.640377
Observations 12

ANOVA
Significanc
  df SS MS F eF
2.28063 5.56141
Regression 2 4.561276 8 9 0.02676
0.41008
Residual 9 3.690739 2    

Coefficient Standard Lower Upper

  s Error t Stat P-value 95% 95%
178.991
Intercept 74.65182 0.417069 6 2.7E-17 73.70835 75.5953
fii cash -
segment -2.3E-05 8.84E-06 2.57502 0.02994 -4.3E-05 -2.8E-06
- 0.03433
fdi INFLOW -3E-05 1.2E-05 2.49153 6 -5.7E-05 -2.7E-06

Interpretation

As significant value is less than 0.05 in both the cases as a result, we can conclude that FII
Inflow and FDI investment have impact on exchange rates. if FII inflow decrease then
exchange rate will increase. same in the case of FDI if FDI investment decrease then
exchange rate will increase

SUMMARY OUTPUT nifty

Regression
Statistics  
Multiple R 0.749448
R Square 0.561673
Adjusted R
Square 0.464267
Standard
Error 0.027475
Observatio
ns 12

ANOVA
Significan
  df SS MS F ce F
0.0087 0.0043
Regression 2 05 53 5.7663 0.02444
0.0067 0.0007
Residual 9 94 55    
0.0154
Total 11 99      

Coefficien Standa Lower Upper Lower Upper

  ts rd Error t Stat P-value 95% 95% 95.0% 95.0%
- -
0.0178 0.8964 0.3933 0.0244 0.0565 0.0244
Intercept -0.01604 94 1 78 -0.05652 38 2 38
fii cash 3.79E- 2.5530 0.0310 1.83E- 1.1E- 1.83E-
segment 9.68E-07 07 31 4 1.1E-07 06 07 06
fdi 5.13E- 2.6065 0.0284 1.77E-
INFLOW 1.34E-06 07 74 3 1.77E-07 2.5E-06 07 2.5E-06

interpretation

AS a significant value is less than 0.05 in both the cases, we can conclude that FII And FDI have
impact on NIFTY performance IF FII and FDI increase then Nifty will decrease
OVERALL ANALYSIS
SUMMARY OUTPUT nifty

Regression
Statistics  
0.43362631
Multiple R 2
0.18803177
R Square 8
0.16449646
Adjusted R Square 7
0.04831042
Standard Error 5
Observations 72

ANOVA
Significanc
  df SS MS F eF
0.03729 0.01864 7.98934
Regression 2 3 6 8 0.000757
0.16103 0.00233
Residual 69 9 4    
0.19833
Total 71 2      

Lowe
Stand r
Coefficie ard P- Lowe Upper 95.0 Upper
  nts Error t Stat value r 95% 95% % 95.0%
- -
0.015841 0.0105 0.1385 0.005 0.036931 0.005 0.0369
Intercept 048 72 1.4984 91 25 555 25 32
fii cash 1.36446E 3.43E- 3.9837 0.0001 6.81E 2.04773E 6.81E 2.05E-
segment -06 07 96 66 -07 -06 -07 06
-
fdi -1.1501E- 3.22E- 0.3575 0.7218 -7.6E- 5.26762E -7.6E- 5.27E-
INFLOW 07 07 1 02 07 -07 07 07
INTERPRETATION

As significant value is less than 0.05 in the case of FII inflow which indicated that FII inflow
Have impact on Nifty performance the relationship is positive if FII inflow increase then nifty
will also increase but in the case of FDI investment significant value is more than 0.05 which
indicate that FDI investment have no impact on Nifty performance
 SUMMARY OUTPUT currency

Regression Statistics  
Multiple R 0.229327008
R Square 0.052590876
Adjusted R Square 0.025129742
Standard Error 3.648822627
Observations 72

ANOVA
Significanc
  df SS MS F eF
Regression 2 50.99498 25.49749 1.915102 0.155076
Residual 69 918.6596 13.31391    
Total 71 969.6545      

Stand
Coefficie ard P- Lower Upper Lower Upper
  nts Error t Stat value 95% 95% 95.0% 95.0%
Interce 68.56859 0.7984 85.873 7.04E- 66.975 70.16152 66.975 70.161
pt 156 87 14 72 65 976 65 53
fii cash
segme 6.83701E 2.59E- 0.2642 0.7923 -4.5E- 5.84436E -4.5E- 5.84E-
nt -06 05 97 39 05 -05 05 05
fdi
INFLO 4.53241E 2.43E- 1.8653 0.0663 -3.1E- 9.37963E -3.1E- 9.38E-
W -05 05 8 8 06 -05 06 05

INTERPRETATION

As significant value is more than 0.05 so we can conclude that FII inflow and FDI investment
have no impact on exchange rates
 CONCLUSION

The present study investigates the FII/FDI impact on Stock market and exchange rate in the
Indian context. this is done using data from 2016 to 2021. Analysis done via correlation and
regression show that there is association between the two variables. Test shows that there is a
positive relationship between FII inflow and Nifty Returns. but there is no relationship
between FDI Investment and exchange rate. there are other serval factors which affect the
price of exchange rate which is not covered in this study.