IT stocks extend fall; Rs 44,280 cr mcap eroded in 2 days

IT stocks continued to reel under selling pressure, falling as much as 3 per cent, wiping-out Rs 44,280 crore from their combined market valuation within two days amid fresh concerns over H1-B visa issue.
Shares of TCS dipped 2.71 per cent, Infosys declined by 1.37 per cent, Tech Mahindra lost 0.66 per cent and Wipro went down by 0.40 per cent on BSE.
These stocks had lost over 4 per cent in the previous session also, witnessing a combined erosion of Rs 44,280 crore from their market valuation in two straight sessions.
The BSE IT index today declined by 1.25 per cent to end at 9,466.90.

HCL Technologies however managed to end in the green, up 0.67 per cent.
A legislation has been introduced in the US House of Representatives which among other things calls for more than doubling the minimum salary of H1-B visa holders to USD 1,30,000, making it difficult for firms to use the programme to replace American employees with foreign workers, including from India.

"Hike in H1B visa cost will have significant impact on the financials...As Indian companies are major users of H-1B visa though they form very less part of the overall workforce (around 11-15 per cent)," Angel Broking said in a report yesterday.

"Depending on the companies, they could easily witness around 60-70 per cent rise in the salaries of the H1B visa dependent workforce and hence have significant impact on the net profit of the companies," it added.
H1-B is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields. The technology companies go for it to hire tens of thousands of employees each year.