Bear mark over IT signals more pain for investors

MUMBAI Investors in Indian IT companies saw their combined wealth plunge by over ₹trillion over the last two days. The pain may not be over yet.

- Ram Sahgal

The hit followed President Donald Trump's weekend proclamation of a $100,000 one-time fee on new H-1B visas, sparking heavy selling and a surge in bearish bets in the derivatives market. Analysts warned the overhang could linger, with rallies likely to be short lived until companies outline strategies to cushion the blow from the visa fee hike.

On Tuesday, a day after bears raised short positions, the Nifty IT fell a further 0.71% to 35249.10. The worst-performing IT stocks included mid-cap stocks Mphasis and Coforge, which tanked up to 3% each, while the biggest large-cap loser was Tech Mahindra, which fell by 2.2%. Midcaps have borne the brunt, as the visa fee hike is expected to squeeze their cash flows more.

In all, seven out of 10 of the Nifty IT index slumped 0.3-3%.