Sensex, Nifty fall for 2nd day as IT stocks bleed post-H-1B visa fee hike; worst day for IT investors in 5 months

Domestic equity benchmarks registered sharp losses on Monday, falling for a second straight day, amid a sell-off in IT stocks following the US government's move to hike a new H-1B visa fee to $100,000 from $2,000-$5,000 with effect from September 21. Analysts say that the development will force Indian IT companies to overhaul their age-old strategy of rotating skilled talent into American projects.

Both headline indices fell 0.6 per cent for the day. The Sensex lost 466.3 points to end at 82,160 while the Nifty50 gave up 124.7 points to settle at 25,202.4. Investors lost about Rs 1.26 lakh crore in wealth as BSE-listed companies' market capitalisation fell to Rs 465.07 lakh crore from Rs 466.33 lakh crore on Friday, according to provisional exchange data.

For the Nifty IT index, it was the biggest single-day fall since April 4.

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The Centre's GST 2.0 rate cuts took effect, simplifying a four main rate slab structure to just two and offering to leave Rs 2 lakh crore into the hands of consumers along with the income tax exemption announced earlier this year.

Top Nifty50 gainers and losers

Five out of the top six Nifty50 losers were IT stocks. Tech Mahindra, TCT, Infosys, Cipla, Wipro, HCLTech, Trent, Tata Motors, Dr Reddy's Labs and IndusInd Bank -- closing between 1.4 per cent and 3.0 per cent lowere -- were the worst hit among the 31 laggards in the 50-blue-chip pack. On the other hand, Adani Enterprises, Eternal, Bajaj Finance, Adani Ports and UltraTech -- rising between 1.2 per cent and 4.0 per cent -- were the top gainers in the 50-scrip basket.

Top index movers

Infosys, RIL, TCS, Larsen & Toubro and HDFC Bank were the biggest contributors to the losses in Sensex and Nifty50.

Nifty Bank

The Nifty Bank fell 0.3 per cent for the day, as weakness in ICICI Bank and HDFC Bank offset strength in Canara Bank.

Financial services enjoy the maximum weight of almost 37 per cent in the Nifty50.

IT stocks take a beating after Trump 2.0's H1-B move

IT stocks dominated Dalal Street in Monday's trade, preventing main gauges from making it to the green. The domestic IT sector earngs nearly two-thirds of its revenue from the US market. Seven in every 10 H-1B visa applicants are from India, show official figures.

The Donald Trump 2.0 administration's move is aimed at protecting American jobs, in line with the Republicans' 'America first' election campaign.

Midcap and smallcap shares

Among broader indices, the Nifty Midcap 100 and Nifty Smallcap 100 gauges fell 0.7 per cent and 1.2 per cent, respectively.

Overall market breadth favoured the bears as only seven stocks rose against every 10 falling scrips on BSE.

Global markets

European shares began the day in the red, with the pan-continental Stoxx 600 index trading 0.3 per cent lower at the last count.

Dow futures traded over 100 points (0.2 per cent), indicating a negative start ahead on Wall Street.