Published December 31, 2021 | Version v1
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DOES COVID – 19 PANDEMIC AFFECT THE SENTIMENTS OF FOREIGN PORTFOLIO INVESTORS IN INDIA – A STRUCTURAL BREAK ANALYSIS

Authors/Creators

  • 1. Research Scholar, Department of Commerce, Sri Venkateswara University, Andhra Pradesh.
  • 2. Professor and Research Supervisor, Department of Commerce, Sri Venkateswara University, Andhra Pradesh.
  • 3. Associate Professor, Department of Commerce, Christ University, Bangalore.

Description

ABSTRACT

The fundamental objective of the present research study is to explore whether the current pandemic COVID19 has a significant impact on the inflows and outflows of foreign portfolio investments in the Indian stock market or not. In order to understand the sudden acceleration or deceleration in the net portfolio foreign investments in the Indian stock market, daily and monthly data on foreign portfolio investments have been compiled and arranged from National Securities Depositories Limited from 1st June, 2019 to 30th June, 2021. To understand the sudden increase or decrease in the time series data, a number of structural break test are developed. Among all, Zivot-Andrew Structural break test is one which is superior to others in identifying singular or multiple structural breaks in a given time series data. So, Zivot-Andrew Structural break test is applied in the present study. And we found that there is a break in the time series data during the month of February exactly on 10th February, 2020. and when we consider the monthly data there is a sudden change in the month of November, 2020. This sudden change is a temporary phenomenon in the Indian stock market as is observed in the time series data. We conclude that the current outbreak of COVID-19 could affect for short term only and there is no long-term impact and at the same time, only US developments affected the net flows of foreign portfolio investments as they are one of the bigger investors in the Indian stock market.

 

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