H-1B visa setback drags down IT stocks, pulling the Nifty IT index lower by 3% and weighing on the broader market.

The IT sector, already grappling with weak June-quarter earnings and a major layoff at TCS amid Trump’s tariffs and reduced IT spending by US businesses on slowdown concerns, faced another blow with the H-1B visa setback—even as US equity markets continued to hit record highs.

Shares of large- and mid-cap Indian IT firms fell 2–5 percent, dragging the Nifty IT index lower by nearly 3 percent in early trade on September 22, as investors grew cautious about the potential impact on business and profitability while awaiting further clarity.

The pressure spilled over to the broader markets, with the Nifty and Sensex slipping about 0.25 percent before recovering from intraday lows. Year-to-date, the Nifty IT index has already declined 18 percent.

Among the biggest losers on the Nifty 50 were IT majors including Tech Mahindra, Wipro, Infosys, HCLTech, and TCS, with Tech Mahindra hit the hardest, sliding nearly 4 percent.

The sell-off was broad-based, affecting even companies such as Firstsource Solutions, which clarified that visa curbs would not impact its operations due to its strong local hiring strategy and globally distributed model. Despite this, its shares were down over 1.5 percent. Similarly, Persistent Systems stated it foresees no material impact from the order, yet its stock also fell sharply in today’s session.