- Indian IT stocks are rallying as the 2020 US Presidential election comes down to the wire between Democratic nominee Joe Biden and the incumbent Donald Trump.
- A Biden victory may bode well for the likes of Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, and Tech Mahindra with his promise to reverse Trump’s suspension of H-1B visas.
- The uncertainty around the election has also brought the rupee to a two-month low of ₹74.81 per dollar, putting money in the bank for Indian IT companies that bill their clients in foreign currency.
Indian IT stocks are on fire as the 2020 US Presidential Election comes down to the wire. For them, the victory of democratic nominee Joe Biden over the incumbent Donald Trump could spell some good news along the horizon.
With Biden at the helm of the US, analysts expect that trade tensions between the US and India will ease up more favourable policies coming into play. Moreover, one of his campaign promises specifically addresses the easing up of H-1B visa regulations.
Among India’s five biggest IT services companies Wipro and Infosys are charging ahead with a share price jump of over 3%.
They’re followed by Tech Mahindra and Tata Consultancy Services (TCS) trading 2% higher. Meanwhile, HCL Tech is the only one trailing behind with only a 1% increase in its stock value.
Indian IT stocks are gaining ground
|Company||Change in share price|
|Tata Consultancy Services (TCS)||2.03%|
Source: NSE as of 12:55 pm
Meanwhile, the rupee has slumped to at least a two-month low against the US dollar amid the uncertainty around the outcome of the election. It’s currently trading at ₹74.81 per dollar. For IT companies, who normally bill their clients in dollars, this means more money in the coffers — subject, of course, to their respective hedging strategies.
However, the volatility in currency movement isn’t restricted to India. Most emerging market currencies have been weaker amid the US presidential race.
Biden’s H-1B visa promise
Moe Vela, former advisor to Biden during his vice presidency days with Barack Obama, believes that Trump’s ban on H-1B visas is just another example of racism and discrimination.
“They’re knowledge workers, and they’re computer-based workers,” he told Business Insider in June. Given those parameters, a ban on H-1B visas may keep them from entering the US, but they can still keep their jobs and work just as well from other countries.
Just last week, the US Department of Homeland Security issued a notice proposing to replace the current H-1B lottery allotment system with a wage-based selection process that will prioritise higher salaries. While that may admittedly be good for employees looking to get hired a fair way, it also makes it more expensive for countries like India to send their workforce abroad for projects.
This is why it’s significant that one of Biden’s promises includes reforming the H-1B visa system.”High skilled temporary visas should not be used to disincentivize recruiting workers already in the U.S. for in-demand occupations,” says his agenda on immigration.
Biden’s plans include supporting the expansion of the number of high-skilled visas and eliminating the limits on employment-based visas by country, which create unacceptably long backlogs.
The democratic nominee assures voters that American and foreign workers will be treated alike.
So far, no winner has been declared in the race between Biden and Trump as states continue to count ballots.
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