ComFin Research shanlax #SINCE1990 http://www.shanlaxjournals.com 47 Impact of GDP and FII on Stock Market: A Study in BSE and NSE in India Aditya Prasad Sahoo Research Scholar, KIIT University, Bhubaneswar, Odisha, India https://orcid.org/0000-0003-4399-2604 Abstract The researchers studied the effect of GDP and FII on the working of the Indian Stock Market. The monthly details of GDP, FII, BSE and NSE are used to accomplish the study’s aims. To fnd out the fndings, the Augmented Dickey Fuller (ADF) Test, Multiple Regression and Granger Causality Experiments have been used. Foreign portfolio investors were stationary at the level of GDP and GDP at the frst gap. From the study, it is found that both the independent variables were signifcant on the dependent variable NSE and BSE. To check the causality relationship between GDP, FII and NSE, the BSE Granger causality model has been used. To fnd out the results, average closing prices of BSE and NSE for 15 years, i.e. from 2000-2015, have been collected. It has been observed that both GDP and FII possess a signifcant impact on the indices of BSE NSE. As per the fndings, the Stock Market in India was effcient, considering these two variables and found a signifcant relationship during the study period. Keywords: GDP, FII, NSE, BSE, ADF test, Garner causality, Regression Introduction A generic term relates to a regulated exchange where equity shares are exchanged indeed the stock market. Stock market activity relies mostly on investor’s logical as well as aberrant behavior. Macro-economic factors like GDP and FIIs would also affect the overall returns in the stock market. Development is evaluated in terms of a rise in the size of the economy of a country. A large measurement of the production of an economy. Gross Domestic Product is the most commonly used indicator of economic production. Gross Domestic Product (GDP), a measure of measurement in national accounting, is defned as the total value, irrespective of ownership, of the fnal products and services generated within the boundaries of a country in one year. In September 1992, Foreign Institutional Investors (FIIs) were authorized to invest in all of the listed shares traded on the Indian stock market for the frst time. According to the RBI Currency & Finance Report (2003-04), there has been a persistent movement toward integrating the Indian economy with the global system since 1991. Ever since, the laws surrounding investment in FIIs were much more fexible. India got enormous amounts of foreign capital, especially from developed countries, due to the abolition of obstacles to capital infows in the form of FII investment. At the end of March 2007, the total net investment of FIIs in the Indian stock market since 1993 had exceeded US$ 50 billion (SEBI, Annual Report, 2006- 07). All foreign remittances of capital have a signifcant impact on the health of the recipient country. On a brighter note, by rising consumption expenditure and extending liquidity management, these capital infows increase economic growth. The research will therefore be performed to know the effect on stock market returns of GDP and FII and to discover the essence and strength of the association between the vector under analysis. OPEN ACCESS Manuscript ID: COM-2021-09013529 Volume: 9 Issue: 1 Month: January Year: 2021 E-ISSN: 2582-6190 Received: 15.09.2020 Accepted: 01.11.2020 Published: 01.01.2021 Citation: Sahoo, Aditya Prasad. “Impact of GDP and FII on Stock Market: A Study in BSE and NSE in India.” ComFin Research, vol. 9, no. 1, 2021, pp. 47-51. DOI: https://doi.org/10.34293/ commerce.v9i1.3529 This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License