• ISSN: 2010-023X
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing: Engineering & Technology Digital Library, ProQuest, Crossref, Electronic Journals Library, DOAJ , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2010 Vol.1(4): 373-379 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2010.V1.66

Testing Semi-Strong Form of Efficient Market Hypothesis in Relation to the Impact of Foreign Institutional Investors’ (FII’s) Investments on Indian Capital Market

Prof. A.Q Khan and Sana Ikram
Abstract—This paper tests the efficiency of the Indian Capital Market in its semi-strong form of Efficient Market Hypothesis (EMH). The efficiency is tested in relation to the impact of Foreign Institutional Investors (FII’s) largely on the Indian Capital Market. For the purpose, two major stock indices viz; National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) that represent the Indian Capital Market have been taken. Monthly averages of NSE & BSE and Monthly FII’s net investment have taken over the period 1st April 2000 to 30th April 2010 in order to test the efficiency of Indian Capital Market. Karl-Pearsons’ Product Moment Correlation Coefficient (Simple Correlation) and linear regression equations have been used to analyze and determine the degree and direction of the relationship between the variables involved. The results suggest that the FII’s do have significant impact on Indian Capital Market, which leads to the conclusion that Indian Capital Market is semi-strong form efficient.

Index Terms—Market Efficiency, EMH, NSE, BSE, FII.

Prof. A.Q Khan, Professor in Finance, Accounts and International Business, Department of Commerce, AMU, Aligarh, India.
Coordinator, PGDPM, Centre for Distance Education (CDE), AMU, Aligarh. E-mail address: abdulaqkhan@rediffmail.com
Sana Ikram, Research Scholar, Department of Commerce, AMU, Aligarh, India. E-mail address: aroma_2008@rediffmail.com
1 Fama, Eugene (1965). "The Behavior of Stock Market Prices". Journal of Business 38: 34–105.

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Cite:Prof. A.Q Khan and Sana Ikram, "Testing Semi-Strong Form of Efficient Market Hypothesis in Relation to the Impact of Foreign Institutional Investors’ (FII’s) Investments on Indian Capital Market," International Journal of Trade, Economics and Finance vol.1, no.4, pp. 373-379, 2010.

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