IT shares trade weak; TCS hits 3-mth low, Infosys, HCL Tech down 4% each

Shares of information technology (IT) companies were trading lower at the bourses with Tata Consultancy Services (TCS), Infosys, Tech Mahindra and HCL Technologies falling up to 4% on the National Stock Exchange (NSE).

Mindtree, Sonata Software, Mphasis, Trigyn Technologies, Larsen & Toubro Infotech, Hexaware Technologies and Mastek were down in the range of 4% to 15%. At 01:41 pm, Nifty IT index, the largest loser among sectoral indices, was down 3%, as compared to 1.6% decline in the Nifty 50 index.

The Trump administration has said it is coming out with new proposals to not only revise the definition of speciality occupations under H-1B visas, but also the definition of employment under this foreign work visa category which is popular among Indian companies, the PTI report suggested.

Such a move, which is part of the Unified Fall Agenda of the Trump administration will have a negative impact on the functioning of Indian IT companies in the US and also small and medium-sized contractual companies in the IT sector, which are mostly owned by Indian Americans, the report added.

Meanwhile, according to research firm Gartner, overall IT spends, including spending on IT services software, computer hardware, data centre systems and communications technologies, are expected to grow slower at 3.2% in 2019 to $3,816 billion as compared to 4.5% clocked in 2018.

Giving the rationale behind the likely slowdown, Gartner said that dip in global growth rates and cost optimisation pressure on the clients will hurt the IT spends. "An expected global slowdown in economic prosperity, paired with internal pressures to cut spending, is driving organisations to optimise enterprise external spend for business services such as consulting," the report said.

Among the individual stocks, TCS hit a three-month low of Rs 1,870, down 3% on the NSE in intra-day trade. The stock was trading at its lowest level since July 5, 2018. It corrected 17% from its record closing high level of Rs 2,256 on October 1, 2018.

Mindtree has tanked 18% to Rs 801 in intra-day trade today, after the company reported subdued revenue growth for the September quarter. The sentiment was also hit on the cautious macro commentary by the management.

TATA Consultancy Services ( TCS )