IT stocks tumble after US visa fee hike, while auto shares race ahead this festive season

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The Indian stock market opens with a weak tone as global uncertainties and domestic pressures weigh on sentiment. The NSE Nifty 50 trades near 25,104, marking a decline of about 0.39 percent. The BSE Sensex is also down by approximately 0.30 percent, showing similar weakness across leading companies. 

Bank Nifty, Nifty IT, Smallcap and Midcap indices are also under selling pressure. The Information Technology index is the worst hit, recording deep losses, while the auto sector emerges as the only strong performer, with gains of around 1 percent. Companies like Maruti Suzuki, Mahindra & Mahindra and Eicher Motors lead the auto rally.

Impact of Visa Policy and Global Concerns

The sharp rise in US visa fees, especially for H-1B visas, is becoming a major drag on Indian IT stocks. The increased cost of sending skilled professionals abroad is seen as a significant hurdle for Indian software exporters. This leads to fears of margin pressure for companies in the sector. As a result, stocks of top IT firms like Tata Consultancy Services face steep declines. The global market environment adds to the pressure. While US indices recently touched record highs, the new visa rules and continued concerns about inflation and interest rates from the US Federal Reserve limit optimism.

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Foreign and Domestic Investor Activity

Foreign Institutional Investors continue to withdraw money from Indian markets. On the most recent trading day, FIIs sold equities worth about  Rs. 2,910 crore. Domestic Institutional Investors stepped in with purchases of approximately  Rs. 2,583 crore, but this buying is not enough to fully absorb the selling pressure from foreign funds. The year-to-date net outflow of foreign money remains large and continues to weigh on sentiment. The persistent selling by FIIs shows that global investors are still cautious about India, especially at current valuation levels.

Currency Movement and Rupee Pressure

The Indian rupee weakens sharply, touching all-time lows near  Rs. 88.48 per US dollar. This decline is linked to the strength of the American currency and the negative impact of US visa policy changes on the Indian economy. A weaker rupee makes imports more expensive, which could lead to higher inflationary pressures. It also impacts sectors dependent on imported raw materials. On the other hand, exporters may gain some advantage from a weaker currency, but the overall effect on the economy remains negative, adding another layer of concern for equity investors.

Sectoral Performance

The performance of different sectors shows a clear divide. Information Technology is under heavy selling pressure as investors fear that higher US visa fees will reduce competitiveness of Indian firms in global markets. On the other hand, the auto sector stands out as the strongest performer. Increased footfalls in showrooms during the Navratri festival season and the recent reduction in GST rates fuel demand expectations. Maruti Suzuki, Mahindra & Mahindra and Eicher Motors record strong gains. FMCG, Real Estate, Power and Pharma sectors, however, remain under pressure as overall market sentiment turns cautious.

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Stock-Specific Developments

Some individual stocks show sharp movements due to company-specific news. KEC International rallies by nearly 7.7 percent after announcing large international orders in the transmission and distribution segment worth about  Rs. 32.43 billion, which translates to approximately 366.6 million US dollars. IndusInd Bank lags behind its peers, with the stock slipping more than 1 percent. Tata Consultancy Services suffers a steep decline of over 3 percent, reflecting sector-wide weakness in Information Technology. In the primary market, Anand Rathi Share and Stock Brokers raises around  Rs. 220.49 crore from anchor investors ahead of its Initial Public Offering, showing continued appetite for select IPOs despite weakness in secondary markets.

Global and Geopolitical Factors

Global cues remain mixed. While Wall Street indices recently climbed to record levels, new US policies like the visa fee hike affect emerging markets like India. Inflation expectations and interest rate signals from the Federal Reserve continue to shape investor behavior. Global geopolitical issues also add to caution. Investors remain watchful of crude oil prices, international trade policies and overall capital flows. Any sharp movement in global risk appetite directly reflects in Indian equities, especially given the heavy involvement of foreign investors.

Investor Sentiment and Flows

Foreign portfolio outflows for September continue to rise, adding to the net outflow of more than  Rs. 1.38 lakh crore so far this year. Domestic institutional buying provides some cushion, but the scale is not enough to reverse the overall weakness. Investors remain cautious as they await clarity on the long-term impact of US visa policies, movements in the Indian rupee, and decisions from central banks.

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Key Market Levels

From a technical perspective, the Nifty 50 finds support around the 25,100 to 25,150 range. A breach below this level could trigger further declines. On the higher side, resistance is expected in the 25,300 to 25,400 zone. For the Sensex, immediate support lies near 82,000, while resistance is seen around 82,500 to 83,000. Traders and investors are closely watching these levels for direction in the near term.

Market Outlook

The near-term outlook for Indian equities stays cautious. The market is expected to remain volatile, with indices likely to oscillate within a defined range. The auto sector may continue to provide some support, especially with festive demand picking up, but heavyweights in Information Technology are expected to stay weak until there is more clarity on US policies. Stability in the rupee is another key factor that will determine whether the market can find a floor. Any further decline in the currency may add to imported inflation and impact sectoral margins, particularly in industries dependent on imports.