An Analysis Upon Various Influences of Globalization on the Growth of Stock Market In India: a Case Study of Fii

The Impact of Globalization on Stock Market Development: A Case Study of Foreign Institutional Investors in India

Abstract

Foreign institutionalinvestors have gained a significant role in Indian stock markets. The dawn of21st century has shown the real dynamism of stock market and the variousbenchmarking of sensitivity index (Sensex) in terms of its highest peaks andsudden falls. The purpose of this paper is to examine the impact of globalisationon stock market development in India using commonly recognised indicators totest this impact. India implemented significant reforms to foster developmentin capital markets. These reforms were brought in with the objective ofimproving market efficiency, transparency, and preventing unfair tradepractices. Indicators used in our study are good proxies for the test of marketdevelopment and deepening. After liberalisation market capitalisation ratio,value traded ratio and turnover ratio increases and volatility ratio hasdeclined. Our results demonstrate overall development in stock markets andoperational efficiency in stock markets of India.