IT stocks crash as Coforge leads selloff; Infosys, Tech Mahindra, HCL Tech, TCS slide as H1-B visa fee hike adds to sector pressure

IT stocks experienced significant selling pressure on Wednesday, leading to a broader market decline as concerns surrounding US visa policies intensified following the suspension of Cognizant's permanent labor certification filings. This development raised worries about scrutiny over green card filings, heightened visa costs, escalating tensions in the Middle East, and increased foreign fund outflows.

Coforge suffered a sharp decline due to the resignation of its chairman and independent director, O P Bhatt. Analysts have expressed concerns about a prolonged higher-interest-rate environment potentially discouraging enterprises from making discretionary IT spending, which could impact demand visibility and revenue growth for Indian IT service providers.

The introduction of expanded 9-11 visa fees has further exacerbated investor sentiment, with the cost of H-1B and L-1 extensions now amounting to an annual bill for companies relying on onshore Indian engineers. The Nifty IT index dropped over 3 percent, with all counters trading in the red. Technical indicators suggest near-term weakness, with the RSI at around 35 indicating weak momentum.

Major IT stocks, including Wipro, Infosys, and TCS, have faced profit booking and selling pressure, while the broader market has been influenced by global economic uncertainties and rising crude oil prices.