Revisiting the impact of foreign portfolio investment on stock market performance during COVID-19 pandemic uncertainty: Evidence from India.

This paper re-examines the causality between stock returns and foreign portfolio investment (FPI) flows in the Indian context during the COVID-19 pandemic. Using the Covid-19 index constructed by Narayan et al. [19] and the Toda and Yamamoto Granger causality test, the study reveals that bi-directional causality runs from FPI flows to stock returns in the early period of the Covid-19 pandemic. Whereas after the peak of the pandemic, there is a unidirectional causality that runs from FPI flows to stock returns.•Bi-directional causality runs from FPI flows to stock return during the initial period of COVID.•In the second period, unidirectional causality runs from FPI flows to stock returns.