The broad objective of the study is to identify the determinants of foreign investment and assess its impact on Indian stock market. FDI and FIIs both have been selected as representative of foreign investment. BSE Sensex has been selected as a sample to represent the Indian stock market. Study period has been taken of seventeen years i.e. 2001-17. Econometrics tools have also been used to explore the factors determining foreign investments in India and measure its impact on Indian stock market. Further to validate the applicability of econometrics models some diagnostic checks like stationarity (ADF) and normality (Jarque-Berra Statistic) test has been applied.
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