Sensex falls 194 points as H1B visa worry hits IT stocks

Mumbai: There were signs of anxiety in the market as the Sensex on Tuesday slumped 194 points ahead of the budget—to be presented on Wednesday—to a one-week low of 27,656 and the Nifty slipped below 8,600 after the Economic Survey projected a lower growth of 6.5% for 2016-17.

The recently introduced immigration restrictions by US President Donald trump and the new legislation that aims to rework the H1-B visa programme dealt a blow to IT stocks, which saw a big fall. TCS, Wipro and Infosys dropped by up to 4.47%, dragging down the BSE IT index by 2.96%, followed by technology that tanked 2.49%.

The Economic Survey for 2016-17, tabled in Parliament by finance minister Arun Jaitley on Tuesday, underscored the need for more reforms. Its GDP growth forecast for this fiscal is lower than the 7.1% put out by the Central Statistics Office earlier this month.

The Sensex closed down 193.60 points, or 0.70%, at 27,655.96, its lowest closing since 24 January when the figure was 27,375.58. It had lost 33 points in the previous session. The broad-based NSE Nifty, which hit a low of 8,552.40 intra-day, managed to cut down losses and ended lower 71.45 points, or 0.83%, at 8,561.30.

The risk-averse behaviour was on display as participants took cues from global stocks that remained on the backfoot following Trump’s controversial crackdown on immigration. “The Economic Survey failed to impress investors who opted for keeping their commitments at a low ebb and wait for the budget,” said Manoj Choraria, a Delhi-based stock broker.

GAIL, Adani Ports, Sun Pharma, Tata Motors, Coal India, Lupin, Axis Bank and NTPC were among those that weighed. Sectoral indices such as oil and gas (1.64%), PSU (1.39%), healthcare (1.38%), infrastructure (1.31%) and metal (1.01%) all turned weak. Selling activity also extended to the broader markers, with the BSE midcap falling 1.10% and the smallcap 1.03%.

According to provisional figures, foreign investors bought shares worth Rs607.36 crore on Monday. There were a few that went up cushioning the fall, which include ITC, PowerGrid, Bajaj Auto, ONGC and HDFC Bank.

In Asia, most markets were closed on Tuesday for a public holiday. Japan’s Nikkei ended lower by 1.69%. European markets, however, were trading higher as major indices in France, Germany and the UK moved up.

The benchmark Sensex dropped and the NSE Nifty slipped below the 8,600-mark on Tuesday as participants kept their bets to a minimum tracking the Economic Survey due later in the day. Besides, weak global cues tempered the mood.

The 30-share index was down with IT, auto, technology, metal and PSU trading in the negative zone, falling by up to 0.92%. The gauge had lost 32.90 points in the previous session. The 50-share NSE Nifty, too, was trading lower. Sentiment remained conspicuously cautious as investors preferred to reduce their positions ahead of the Economic Survey due on Tuesday and the Union budget on Wednesday.