Stock market crash: The Indian stock market continues to be under FIIs’ selling pressure, as they sold Indian stocks worth ₹7,536 crore on Friday. Even though DIIs bought shares worth ₹12,293 crore in the last session of February, they failed to change FIIs’ trade pattern. Finally, FIIs finished as net sellers in February, by selling shares worth ₹6,640 crores. This is the eighth straight month when FIIs have ended as net sellers. They have been selling since July 2025.
Bank of Japan’s interest rate decision
According to stock market experts, the trend is expected to worsen further as the US economy comes under inflationary pressure from the Central Bank of Japan’s interest rate hike. They said that after a 17-year gap, the Central Bank of Japan decided to abandon the negative interest rate regime and raise interest rates to 2.50%. This is expected to create demand for Japanese treasury bonds and to end the cash carry system for FIIs. Now, the cost of funding for FIIs is expected to rise, while the availability of funds is expected to decline. So, the Bank of Japan’s next meeting (scheduled for March 18 – 19) is in the spotlight for both bulls and bears in global markets.
Experts also maintained that a rise in demand for Japanese treasury bonds would put pressure on US treasury bonds, leading to a weaker US dollar and higher US inflation. These developments are expected to put pressure on the US stock market, and the Indian market won’t remain insulated. They said the US economy is on the verge of another recession, which may turn into a depression in the next two years. Experts said the Indian economy and the Indian stock market won’t remain insulated from it, and the Nifty 50 index may reach 15,000 by the end of 2027.
Looming economic recession in the US
Speaking on the status of the US economy, Amit Goel, Chief Global Strategist at PACE 360, said, “The US economy is in a fragile resilience state, where a low rate of hire is not allowing the rate of fire to go upward. In other words, job losses in the US economy are being checked by lower hiring rates. This is happening due to the Bank of Japan’s interest rate decision. After a gap of 17 years, the Japanese Central Bank has announced to increase its interest rates up to 2.50%. Hence, investors are waiting for the Japan Central Bank interest rate to come around 2.50%, with a surplus amount.”
Amit Goel said that investors are waiting for a further rise in the Bank of Japan’s interest rate before buying Japan’s treasury bonds. Hence, demand for US Treasury bonds dips, putting pressure on the US dollar (USD) and preventing the US Fed from containing inflation below 2%. In fact, this has led to a new kind of pressure on the US economy — rising US debt, which is already around $38 trillion. Due to this debt, the US has to pay $1 trillion in interest every year.
Anuj Gupta, a SEBI-registered market expert, said that the Bank of Japan’s decision to scrap the negative interest rate regime has put an end to the easy cash-carry trade in the global economy. Now, FIIs are facing rising funding costs, and global markets are facing a liquidity crisis, including the Indian stock market. This is one of the major reasons FIIs have remained net sellers for the last eight consecutive months. This is putting pressure on household debt and earnings per share, a symptom of a looming slowdown in the national economy.
Indian economic condition
Expecting the US economic crisis to hit the Indian economy by the end of 2026, Amit Goel of PACE 360 said, “The fragility of the US economy’s resilience is expected to weigh on India by October to November 2026. The reason is India’s household debt reaching 70% of GDP, and earnings per share nosediving by around 50%. So, the upcoming economic crisis may turn into a depression, as large job. losses are also expected. As the IT and tech sector would be the biggest casualty, the economic crisis would last for a long time, maybe for two or two and a half years.”
The experts predicted that the next two years would be highly challenging for the equities market and advised investors to look at safe-haven assets.
Nifty 50 may touch 15,000 by the end of 2027
Expecting a big drop in the Indian stock market, Amit Goel of PACE 360 said, “The Nifty 50 is expected to go below 21,000 by the end of the current year. The 50-stock index would continue to fall next year, with some dead-cat bounces. By the end of 2027, the Nifty 50 index is expected to come around 15,000.”
Where to invest?
Advising investors to look at safe-haven assets in the upcoming two years, Amit Goel said, “One should accumulate long-term government bonds before the end of the current financial year and hold it for the next two years, until the global slowdown subsides.”
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
