Key gauges continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, dragged by pharma stocks and relentless foreign fund outflows. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,995.42 crore on Thursday, according to exchange data. US H-1B visa fee concerns and a weak trend in global markets also added to the bearish trend in domestic equities. Traders overlooked Crisil Intelligence in its note stated that US President Donald Trump's move to levy higher fees for granting the H-1B visas will impact Indian IT majors' profit margins by only 0.20%. This is because the reliance of IT companies on H-1B visas has been reducing since 2018, when the denial rates for the visa applications increased to 24%. On the global front, Asian markets are trading mostly in red after strong US economic data and mixed signals from the Federal Reserve officials on rate cuts sparked worries about lofty valuations on Wall Street. 

The BSE Sensex is currently trading at 80874.19, down by 285.49 points or 0.35% after trading in a range of 80708.34 and 81033.09. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.74%, while Small cap index was down by 1.02%.

The lone gaining sectoral index on the BSE was Auto up by 0.15%, while Healthcare down by 1.58%, IT down by 1.24%, Telecom down by 1.20%, TECK down by 1.01% and Basic Materials down by 0.88% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.96%, Larsen & Toubro up by 1.84%, Maruti Suzuki up by 0.89%, Titan Company up by 0.60% and ITC up by 0.47%. On the flip side, Sun Pharma down by 2.51%, Infosys down by 1.57%, Asian Paints down by 1.37%, Tata Steel down by 1.19% and HCL Technologies down by 1.18% were the top losers.

Meanwhile, Crisil Intelligence in its note has said that US President Donald Trump's move to levy higher fees for granting the H-1B visas will impact Indian IT majors' profit margins by only 0.20%. This is because the reliance of IT companies on H-1B visas has been reducing since 2018, when the denial rates for the visa applications increased to 24%. It said ‘The US decision to impose a $100,000 fee on new H-1B visas for foreign workers will snip just 10-20 basis points from the operating margins of Indian information technology (IT) services companies next fiscal’.

It said these companies, which had operating margins of 22% in FY25, are likely to share the incremental cost with clients, and added that the pass-through is estimated at 30-70%. It noted that IT firms have expanded offshore delivery, opened near shore centres and hired locally in the US, and added that this trend has continued even as the denial rate eased to 3% in 2024. Citing official US data, it said the number of Indian employees on H-1B visas working for TCS, Infosys, Wipro and HCL Technologies almost halved from 34,507 to 17,997 between 2017 and 2025.

It said India's IT services industry is expected to reel in $143-145 billion this fiscal year, marking a revenue growth of 2-4% over last fiscal year, and added that from next fiscal year, growth is expected to be only marginal or flat. It also said between October 2023 and September 2024, total H-1B visas issued for four IT companies, which account for 50% of the industry revenue, stood at 34,507, and added that over 35% was for initial employment and 65% for continuing employment. It further said the share of initial employment is expected to decline over the medium term.

It said visa expenses come at 0.02-0.05% of the total employee cost, with H-1B visa fees ranging between $2,000 and $5,000 per person. Over a third of the approved H-1B applications from October 2023 to September 2024 were for initial employment and if this share remains constant next fiscal year, the new fee structure could crank up visa cost to 1% of total employee cost. If the share is reduced, visa-related costs are expected to remain 0.3-0.6% of the total employee cost. Tier-1 IT companies such as TCS, Infosys, Wipro and HCL generate 96% of their revenue from the international markets, with the US alone accounting for 53%. Last fiscal year, the industry exported $119 billion in services, reflecting its scale in global outsourcing.

The CNX Nifty is currently trading at 24794.95, down by 95.90 points or 0.39% after trading in a range of 24759.00 and 24868.60. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.89%, Larsen & Toubro up by 1.81%, Hero MotoCorp up by 1.27%, Maruti Suzuki up by 0.90% and Eicher Motors up by 0.83%. On the flip side, Sun Pharma down by 2.40%, Indusind Bank down by 2.05%, Wipro down by 1.86%, Asian Paints down by 1.58% and Infosys down by 1.58% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 274.93 points or 0.6% to 45,480.00, Taiwan Weighted lost 459.65 points or 1.77% to 25,564.20, Shanghai Composite weakened 6.88 points or 0.18% to 3,846.42, KOSPI dropped 100.58 points or 2.9% to 3,370.53 and Hang Seng declined 173.68 points or 0.66% to 26,311.00.

On the flip side, Straits Times rose 4.52 points or 0.11% to 4,278.38 and Jakarta Composite gained 30.45 points or 0.38% to 8,071.12.