IT shares decline on US visa issue; TCS, Wipro dip 2%

IT shares were down on reports amid probe by US govt for alleged violations of H1-B visa rules

Benchmark share indices trimmed intra-day gains as upside gains remain capped amid profit taking in IT majors on talk that the US government has inititated probe against  large Indian software companies for alleged violations of H1-B visa rules.

At 1:15PM, the 30-share Sensex was up 19 points at 26,390 and the 50-share Nifty was up 3 points at 7,968.

The Indian rupee trimmed early gains and was trading lower at 64.02 against the previous close of 63.97.

Meanwhile, the government is expected to release May CPI and April IIP data later today.

Further, the Finance Minister in a press conference post his meeting with chiefs of public and private sector banks said that the corporate credit growth is yet to pick up and also said banks may reduce rates. The government will also look into the capitalisation of PSU banks, he added.

SECTORS & STOCKS

The BSE IT Index was down 1.2% while Consumer Durables, Metal and Realty indices were down 1-1.4% each.

TCS and Wipro were down 2% each while Infosys was down 1%. The Department of Labour has opened the investigation against Tata Consultancy Services and Infosys for "possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility Southern California Edison," PTI said in a report quoting the New York Times.

Tata Motors was down 2.6% after the company's British luxury car unit Jaguar Land Rover announced its monthly sales data for the month of May 2015 yesterday, 11 June 2015.

Metal stocks weakened as weak economic growth in China would hurt export revenues.
Tata Steel, Vedanta and Hindalco were down 0.7-2% each.

Other losers include, L&T and Sun Pharma among others.

Reliance Inds is up over 1% Reliance Jio, the wireless telephony and data services subsidiary of Reliance Industries will launch its commercial services by December this year, Chairman of RIL, Mukesh Ambani said here today at its 41st annual general meeting of shareholders.

Other gainers include, HDFC, ICICI Bank and ITC among others.

In the broader market, the BSE Mid-cap index was trading flat while Small-cap index was down 0.4%.

Market breadth was weak with 1,422 losers and 938 gainers on the BSE.