InvestorQ : Why did IT companies like TCS, Infosys and Tech Mahindra take a hit on 04 August?
sarah Leo made post

Why did IT companies like TCS, Infosys and Tech Mahindra take a hit on 04 August?

Answer
user profile image
vidhya Laxmi answered.
1 month ago


Shares of IT companies traded deep in negative territory on Tuesday after Donald Trump signed an executive order restricting all US federal agencies from contracting or subcontracting foreign workers. This will hurt Indian workers on H1-B visas on projects for US federal companies. The problem came to the fore after Trump struck down the idea of Tennessee Valley Authority to outsource 20% of its IT tasks abroad.

Most of the IT stocks including the large caps and the mid caps saw cuts in the day as the impact was likely to be driven by the fear factor more than the actual facts of the case. What really concerns Indian IT is the statement from Trump that he wanted to focus only on hiring Americans for local tasks. Trump is changing regulations to prevent any H1-B worker from abroad replacing an American worker.

It may be recollected that Trump has already suspended the H-1B visas along with other types of foreign work visas until the end of 2020. However, the move did not impact existing visa holders. The new rule will keep Indians out of most government contracts, which are a big chunk.