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IT stocks: Persistent Systems, LTIM, TCS, Infosys surge up to 5% on Nov 6

The information technology (IT) stocks were in great demand on Wednesday, with Nifty IT index surging 3.56 per cent in intraday deals

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Shivam Tyagi New Delhi

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The information technology (IT) stocks were in great demand on Wednesday, with Nifty IT index surging 3.56 per cent in intraday deals. Individually, stocks jumped up to 5 per cent with Persistent Systems surging 4.98 per cent, LTIMindtree up 3.75 per cent, TCS rising 3.55 per cent and Infosys gaining 3.46 per cent intraday.
 
On other hand, IT firms like LTTS, HCL Technologies, Coforge, Tech Mahindra, Wipro and Mphasis gained between 1-3 per cent each intraday. 
 
This came after US Presidential election trends showed a likely victory for former President Donald Trump. Trump was leading on 247 electoral votes, while Vice President Kamala Harris was ahead on 213 electoral votes, according to the Washington Post. 
 
 
For the post of US President, a candidate requires 270 electoral votes out of the total 538 votes to claim presidential win.
 
According to analysts Trump’s expansionary fiscal policy – cutting corporate tax rate to 15 per cent from 21 per cent for domestic production – could be positive for IT Services demand as it eases budgetary pressures.
 
“To sum up, we believe Trump’s Presidency, while headline negative, will have limited impact on India IT Services players,” said analysts at JM Financial in a recent report.
 
Another Trump presidency may likely tighten immigration laws said analysts but is unlikely to impact Indian IT players. 
 
According to JM Financial’s report, two-third of IT Services players’ US resources were on H-1B/L-1 visas in FY17. The ratio of visa dependent resources has now likely flipped. This is reflected in a 50-80 per cent drop in H-1B approved visas for Infosys, TCS and Wipro over FY15-24. This, analysts said insulates Indian IT players to a large extent from any spike in denial rates, if Trump were to return to office.
 
Other impacts the Trump presidency could have is significant increase in wage obligation for
H-1B visas. However, select software roles indicate that average wages for H-1B resources today are 25 per cent above the prevailing wages. “Claims of H-1B employees displacing US workers due to lower wages are therefore difficult to ascertain,” analysts at JM Financial noted. 
 

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First Published: Nov 06 2024 | 12:47 PM IST

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