Sensex, Nifty Fall Sharply As IT Stocks Drag Stock Market After H-1B Visa Fee Hike

Benchmark equity indices Sensex and Nifty ended sharply lower on Monday, dragged by IT stocks amid concerns over the US President Donald Trump's decision to raise H-1B visa fees to USD 1,00,000 per worker.

Also, selling in blue-chip Reliance Industries took the markets down.

Falling for the second day in a row, the 30-share BSE Sensex dropped 466.26 points or 0.56 per cent to settle at 82,159.97. During the day, it tanked 628.94 points or 0.76 per cent to 81,997.29.

The 50-share NSE Nifty declined 124.70 points or 0.49 per cent to 25,202.35.

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From the Sensex firms, Tech Mahindra, Tata Consultancy Service, Infosys, HCL Tech, Tata Motors, Trent, Reliance Industries and Larsen & Toubro were among the major laggards.

However, Eternal, Bajaj Finance, Adani Ports and UltraTech Cement were among the gainers.

President Trump on Friday signed a proclamation raising the fee on the visas used by companies to hire workers, including from India, to live and work in the US.

The H-1B visa fee of USD 1,00,000 would be applicable only to new applicants, a White House official clarified on Saturday.

"The domestic market traded on a lower note amid a sharp increase in H-1B visa costs, which weighed on the IT index, while mid and smallcap stocks saw profit-booking following recent gains. GST rationalisation, a normal monsoon, lower interest rates, and tax incentives are expected to support consumption, narrowing the gap between valuations and growth prospects.

"Foreign investors are gradually turning buyers, driven by expectations of earnings upgrades in H2FY25, with consumption-focused sectors likely to attract attention and support the market," Vinod Nair, Head of Research, Geojit Investments Limited, said.

The BSE midcap gauge declined 0.78 per cent and smallcap index went lower by 0.71 per cent.

Among sectoral indices, BSE Focused IT tanked 2.98 per cent, IT (2.73 per cent), teck (2.09 per cent), capital goods (0.77 per cent), industrials (0.75 per cent) and auto (0.41 per cent).

Utilities jumped 2.56 per cent, power (1.66 per cent), metal (0.39 per cent), oil & gas (0.36 per cent) and services (0.08 per cent).

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As many as 2,511 stocks declined while 1,775 advanced and 169 remained unchanged on the BSE.

"Early weakness, driven by selling in IT stocks amid concerns over the H-1B visa fee hike, was partly offset by a rebound from the day's low. Sentiment also found some support from the GST rate cuts that came into effect today, which helped limit losses during the first half.

"However, sustained pressure from heavyweight stocks dragged the index lower as the session progressed, with the Nifty finally settling at 25,202.35," Ajit Mishra - SVP, Research, Religare Broking Ltd, said.

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index settled in positive territory while Hong Kong's Hang Seng ended lower. Markets in Europe were trading lower. US markets ended higher on Friday.

Global oil benchmark Brent crude dipped 0.10 per cent to USD 66.61 a barrel. Foreign institutional investors (FIIs) bought equities worth Rs 390.74 crore on Friday, according to exchange data. On Friday, the Sensex tanked 387.73 points or 0.47 per cent to settle at 82,626.23. The Nifty declined 96.55 points or 0.38 per cent to 25,327.05.