Mumbai–Indian IT stocks tumbled on Tuesday as the US government introduced a proposed visa reform bill in the US House of Representatives.
The bill spooked investors, as it seeks to “double the minimum wages” offered by the IT firms in the US.
The S&P BSE IT index plunged by 292.54 points or 2.96 per cent during the intra-day trade.
In addition, IT majors such as Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra closed deep in the red.
The “High-Skilled Integrity and Fairness Act of 2017”, introduced in the House of Representatives by California Congressman Zoe Lofgren, calls for doubling the minimum salary of H-1B visa holders to $130,000 from the current minimum wage of $60,000 per year — a move that could impact Indian techies.
The bill, likely to be signed by President Donald Trump, would make it difficult for firms to use the programme to replace American employees with foreign workers, including from India, with lower wages.
“IT stocks traded in the negative after H1-B visa bill went into House of representatives, as it will have negative impact on all Indian IT companies,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
“Every 10 per cent hike in H-1B can hurt earnings by nearly 10 to 12 per cent of IT companies.”
Shares of IT major TCS slumped by 4.49 per cent to Rs 2,229.90, followed by Tech Mahindra by 4.23 per cent to Rs 451.75, HCL Technologies by 3.67 per cent to Rs 808.85, Infosys by 2.01 per cent to Rs 929.30, and Wipro by 1.62 per cent to Rs 457.10. (IANS)