With the gradual opening up of the Indian economy there has been an increasing presence of foreign portfolio investment in the Indian markets. The Indian capital market is thus acquiring a global image. Indian capital market has responded to all these developments favourably.
Globalisation of the capital market will also mean the following:
i) The market will be more sensitive to developments that take place abroad.
ii) There will be a power shift as domestic institutions are forced to compete with the FIIs who control the floating stock.
iii) Structural issues will come to the fore with a plain message i.e. reform or despair.
iv) Significance of mutual funds will increase for the individual investor as they would be managed by professional managers insulating from the risk of the volatile stock market operations.