Infosys, TCS, Wipro: IT stocks tumble as Trump plans immigration suspension

Mindtree slipped 6 per cent to Rs 739, while Hexaware Technologies was down 4 per cent to Rs 265.
Shares of information technology (IT) companies were under pressure, falling by up to 6 per cent on the National Stock Exchange (NSE) in early morning deals on Tuesday, after US President Donald Trump announced a temporary suspension of immigration into the country.

Tata Consultancy Services (TCS), Infosys, Tech Mahindra, Wipro, HCL Technologies, Hexaware Technologies, NIIT Technologies and Mindtree were down 1 per cent to 5 per cent on the NSE in intra-day trade.

However, Nifty IT index has outperformed the market, down 2.1 per cent compared to 2.7 per cent decline in the benchmark Nifty 50 index.

“In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!,” the US President wrote in a Twitter post. CLICK HERE TO READ FULL REPORT

Among individual stocks, Mindtree slipped 6 per cent to Rs 739, while Hexaware Technologies was down 4 per cent to Rs 265 on the NSE in early morning deals.

Infosys reacts to earnings, Trump order

Infosys, which announced its March 2020 quarter financial performance post market hours on Monday, slipped 4 per cent to Rs 628 in intra-day trade. The stock, however, recovered partially as trade progressed to Rs 642 levels.

"Despite COVID-19 impact on utilisation, in January-March quarter (Q4FY20), Infosys was able to defend its gross margins (QoQ, 33.4 per cent), which is comforting. Large deal signings in March 2020 ($1.7 billion v/s $1.8 billion in Dec’19) were impacted. However, it is important to note that run-rate of new deal wins showed a meaningful increase (50 per cent QoQ)," wrote analysts at Motilal Oswal in a post-result note.

The brokerage firm expects supply-side aspects to ease even as Work from Home (WFH) may outlast lockdowns for a significant share of the workforce."In light of the heightened uncertainty in the near term, we were not taken aback by the cautious outlook of the company. Beyond near-term challenges, Infosys should be a key beneficiary of digital IT spends by enterprises," they said.

 


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