New Delhi, June 23 -- The Indian equity market maintains a strong, direct relationship with foreign capital inflows and the domestic currency, according to a study report by Bank of Baroda.

The study revealed that the Sensex and Foreign Institutional Investor (FII) flows share a positive correlation, signalling that an increase in the Sensex moves hand-in-hand with rising foreign capital. A similar positive relationship exists between the Sensex and the Rupee.

Data from the report showed that this economic relationship strengthened considerably between April 2022 and March 2026. During this specific phase, the positive correlation coefficient between the Sensex and the Rupee reached 0.6, while the correlation between the Sensex and FIIs...