Indian IT Firm Stocks Dip After Trump Administration Suspends Fast Tech Visas
US shares of Infosys Ltd fell 1.2% and Wipro Ltd edged down 0.2% after the US Citizenship and Immigration Services said it would suspend "premium processing" of the visas for up to six months.
Stewards are seen behind desks with the logo of India's third-largest software services firm Wipro Ltd inside the company's headquarters in Bengaluru, India, October 21, 2016. Credit: Abhishek N. Chinnappa/Reuters
San Francisco: Technology services company shares dipped on Monday after the Trump administration announced it would temporarily suspend expedited applications for H-1B visas widely used by foreign tech workers.
US shares of Indian IT company Infosys Ltd fell 1.2% and Wipro Ltd edged down 0.2% after the US Citizenship and Immigration Services (USCIS) said on Friday that it would suspend "premium processing" of the visas for up to six months.
New York-based Cognizant Technology Solutions Corp dipped 1.7%.
Following President Donald Trump's election in November, Infosys and Wipro sold off due to concerns he would keep promises to crack down on immigrants who he said were taking jobs from US citizens.
But the companies' shares have mostly recovered due to growing expectations among investors that any potential change to the H-1B visa program would happen via a lengthy legislative process and not through a quick executive order.
"The longer time it takes, the longer the regulators and politicians will have to do their homework to understand the impact of their acts," said Wedbush Securities analyst Moshe Katri.
Infosys, Wipro and other Indian IT companies serving US corporations are among the largest sponsors for H-1B visas, using them to employ programmers and other technology workers.
Banks are key customers of those IT companies and could increase spending if Trump makes good on promises to cut corporate taxes and reduce financial regulation, Katri added.
Short interest in Infosys in mid-February rose to 2.8% of outstanding shares, its highest level in about two years, according to Thomson Reuters data.
USCIS said that suspending premium processing will allow it to reduce a backlog of long-pending visa petitions and thus reduce overall H-1B processing times.
(Reuters)
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