2025, Vol. 8, Issue 2

This paper explores relationship between the stock markets of foreign stock markets influencing on Foreign Direct Investment (FDI) in India. The study uses panel data for the period of 2001-2002 to 2024-2025. The study has investigated the relationship between FDI and Indian Stock market returns & Foreign Stock market returns. for this purpose, the Foreign Stock market is defined as foreign countries having substantial contribution (top five countries) for the FDI to the Indian economy. In the present study the foreign stock considered are SEMDEX, FTSE, NIKKEI, NYSE, AEX Index and BSE-SENSEX (Indian). The study finds that SEMDEX having p-value as 0.005 which is less than 0.05 and FTSE having p-value as 0.02 which is less than 0.05 both showed statistically significant.