DIIS AND VOLATILITY OF INDIAN STOCK MARKET: AN ANALYSIS

There are different types of institutional investors in capital market, these include both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). Many studies have previously been done in the domain of foreign investors, but relatively few have been done for domestic investors. Research work in this area is primarily aimed at understanding the influence of DIIs on the volatility of the Indian stock market. For this purpose, sensex and domestic institutional investments have been taken as the illustrative variables. The ADF test, correlation analysis and GARCH model are suitable for this analysis and data for a period of twelve years was gathered from January 2011 to December 2022. After running the GARCH application, it is possible to conclude that DIIs' investments have an impact on the volatility of the Indian stock market.