IT stocks fall for 2nd session over proposed H1B visa curb

IT stocks fell for the second consecutive session on Friday after two US lawmakers reintroduced on Thursday a Bill that seeks to place stringent conditions on grant of H-1B visas. If the law is passed, employers will have to pay more for workers going to the US.

S&P BSE IT index slumped by 2.54 % by ending at 9880.61 and R22,000 crore worth IT market cap was wiped out on Friday’s trade.

Stocks of Sonata Software, Zen technologies, Quickheal, Mindtree, Tech Mahindra, Hexaware, HCL, Ramco Systems and Nucleus were among the biggest laggards that went down between 3 to 5.5 %. While Stock prices of Wipro, D Link, TCS, Smartlink, Infosys and Tata Elxi went down between 2 to 3 %. However, Datamatics was the biggest gainer of the day among IT stocks. The Stock of Datamatics was up 2.55 % at R39. The stock is doing well currently because it recently hit a 12-year high on the BSE in December 2016.

Another reason for the decline in IT shares is December- quarter earnings of Tata Consultancy Services Ltd and Infosys Ltd due next week.. “The market is consolidating ahead the Q3 results which kick starts from next week. IT sector will initiate the season, and a setback on H1B visa has created a negative headwind,” said Vinod Nair, head of Research, Geojit BNP Paribas Financial Services Ltd.

The Protect and Grow American Jobs Act reintroduced on Thursday proposes to raise the minimum salary of H1B visa aspirants to $ 100,000 per annum from the current $60,000. Besides, the US immigration reforms seeks to make a Masters degree mandatory for H1B visa holders. “Stocks continued the week long surge, but with Q3 figures expected to flow in shortly, and with IT stocks bogged down by US visa restrictions fears, profit booking gained traction as the day drew to a close,” said Anand James, chief market strategist, Geojit BNP Paribas Financial Services Ltd.

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