IT stock tumble as US proposes changes to H-1B, L-1 visas

Nine IT stocks fell by 0.97% to 3.96% on reports that US H1-B visas may see changes aimed at better protecting US workers and wages.

The S&P BSE Sensex was down 177.84 points or 0.44% to 40,397.33. The BSE IT index was down 2.09% to 14,887.56, underperforming the benchmark Sensex.

MphasiS (down 3.96%), Infosys (down 2.76%), Tech Mahindra (down 2.38%), HCL Technologies (down 1.99%), Hexaware Technologies (down 1.89%), TCS (down 1.74%), MindTree (down 1.25%), Oracle Financial Services Software (down 1.07%) and Wipro (down 0.97%) declined. Persistent Systems was up 0.16%.

According to media reports, the Department of Homeland Security (DHS) is proposing to revise the definition of specialty occupation to increase focus on obtaining the best and the brightest foreign nationals via the H-1B program.

The changes, proposed under the Fall 2019 Unified Agenda published by the White House Office of Management and Budget on Wednesday, may reportedly see the introduction of additional requirements to ensure employers pay appropriate wages to H-1B visa holders.

A similar set of changes has also been proposed for L-1 visas, used in intra-company transfers. In addition, the DHS has suggested that the ban on the work authorization for spouses of H-1B visa holders should be implemented by March next year.

DHS has proposed a target of December 2019 and September 2020 respectively to publish the rule for the H-1B and L-1 visa changes, reports added.

The move could have an adverse impact on Indian IT companies in the US. US is the biggest outsourcing market for Indian IT firms.

India's External Affairs Minister, S. Jaishankar, reportedly told the Upper House of the Parliament on Thursday that Indians today account for 93% of total number of visas issued under H4 category by US. Trump administration has indicated that it will further review the programme.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.8625, compared with its close of 71.765 during the previous trading session.

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