International Influence on Stock Markets in Pakistan

Stock markets are one of essential tools to attract foreign investments.In the field of business finance stock market plays very important role; it provides a platform for business organization & investors.Volatility in stock market is because of both national & international factors like money supply, inflation, recession, exchange rate, foreign investment, migration of people and denominated of foreign currency.This study investigates the effect of international factors; exchange rate & foreign investment, on stock market of Pakistan.Statistical analysis showed direct relationship between stock markets and international factors.Using data from previous 25 years (i.e.1990-2015), it is found that stock market is more vulnerable to exchange rates as compared to foreign investments.