Indian information technology stocks fell amid slightly positive broader markets, on concerns that the new US President Donald Trump’s protectionist policies will hurt Indian services exporters.
Shares of top five IT companies fell as much as between 0.1% and 1.1% in the early morning trade.
Tata Consultancy Services, the largest IT company, fell 0.46% to Rs 2,274.85 on NSE, while Infosys, the second largest, fell 0.68% to Rs 942.25. Tech Mahindra was the biggest loser among the five, falling as much as 1.07% to Rs 463.65. HCL Tech was down 0.43% at Rs 835.15, and Wipro was lower 0.15% at Rs 477.2.
Benchmark indices recovered their early morning losses. BSE Sensex was up 0.32% at 27120.21 points, while NSE Nifty was up 0.4% at 8,382.5 points.
“We will follow two simple rules – buy American and hire American,” Trump said immediately after taking oath of office on Friday. Observers said it was one of the most radical inauguration speeches by a US President.
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Indian information technology service companies, bulk of whose earnings come from offshore clients in the US and other western markets, use H1B visas to send employees to the US to work with the clients on their projects. However, of late, it has created resentment among the US residents, who face tougher competition for jobs.
Indian companies face new challenge with the US President Donald Trump seeking to limit workers from other countries taking over jobs that locals could have had. Almost a $100 billion of the $150-billion Indian IT industry comes from exports, with the US alone contributing to about 60-65% of the exports.
Earlier, Indian IT companies had expressed hope that Trump’s policies may not hurt them very bad, and that they have already stepped up local hiring in the US to counter any protectionist impact.
Tech Mahindra CEO CP Gurnani had said that the company will continue to invest in hiring more and more local people in the US to augment competitiveness across locations, and in response to Donald Trump’s potential restrictions on immigrant workers taking up jobs in the US.
Infosys said it is hiring more and more people locally in the US to engage better with the clients and foster innovation on the ground, notwithstanding the potential visa restrictions. The largest company, Tata Consultancy Services, as well has begun to address these concerns proactively, it had said, adding that it has been making changes to its business models for the last one year, fully aware of the consideration that it will have to operate in a restrictive visa regime.
