IT stocks slip as Trump signs order to restrict H-1B visa use; TCS falls 1%

IT stocks slip as Trump signs order to restrict H-1B visa use; TCS falls 1%

"Today I am signing an executive order to ensure that the federal government lives by a very simple rule. Hire American," Trump said.

Shares of information technology (IT) companies traded in the negative territory on Tuesday after the US President Donald Trump signed an executive order restricting federal agencies from contracting or subcontracting foreign workers, hurting Indian IT professionals who work in the US on the H-1B visa.

At 09:38 am, the Nifty IT index was 0.73 per cent lower at 17,834.70 levels, with 9 out of 10 constituents trading in the red. Among individual stocks, Larsen & Toubro Infotech slipped the most - down 2 per cent to Rs 2,441.60. Next on the list were Tech Mahindra (down over 1.5 per cent), HCL Technlogies (down over 1.3 per cent), Tata Consultancy Services (TCS), and Mindtree - both down 0.85 per cent. NIIT Tech was the only stock on the index that was trading in the green.


In comparison, the benchmark Nifty50 index was ruling 58 points or 0.53 per cent higher at 10,949.40.

While signing the order, Donald Trump said, "Today I am signing an executive order to ensure that the federal government lives by a very simple rule. Hire American," the US President told reporters in the Oval Office of the White House before signing the order against hiring H1B visa holders for federal contracts.

"As we speak, we're finalising the H-1B regulation so that no American workers be replaced ever again. H-1B should be used for top highly paid talent to create American jobs, not as inexpensive labour programmes and destroy American job," said the president.

Over a month ago when the Trump administration on June 23 suspended the H-1B visas along with other types of foreign work visas until the end of 2020, analysts at Prabhudas Lilladher had said that "the move will neither affect visa holders currently in the US nor does it affect renewal or change of status of existing visa holders inside the US."

They had also noted that the Tier 1 Indian IT companies have reduced dependence on H-1B visas to fulfill onsite demand in the last two-three years, due to a sharp decline in visa approval rates especially for new visa applications. "We believe Tier 1 IT companies are in a good position to manage supply constraints. Our pecking order of impact (from low to high) is: HCL Tech, Infosys, Wipro, TCS, Tech Mahindra," the brokerage had said in a report issued on June 24.



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