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Abstract

Economic slowdown is a situation where decline in the growth of the GDP (Gross Domestic
Product) of the nation which leads the nation to rise in unemployment and decline in
productivity. The India’s GDP growth is running down from past six quarters. The Foreign
Portfolio Investors (FPIs) are remained as net sellers in majority of the times in the period.
This study intends to analyse the influence of FPIs on Indian Stock market in the current
economic slowdown condition. The study uses daily data of FPI flows, Nifty and exchange
rate to analyse the influence of FPIs on Nifty at test period. The GARCH(1,1) model to
resulted that the market is responding to the recent news in the economy rather its own past
volatility at present economic slowdown condition in India.

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