Shares of Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd and Tech Mahindra Ltd led Sensex gainers, as the 30-pack index breached the 80,000 level in Wednesday's trade amid reports Donald Trump was ahead Of kamala Harris 4-2 in swing states. Overall, Trump was leading on 230 electoral votes against Harris' 205.
TCS shares climbed 3.03 per cent to Rs 4,092.05. Infosys shares jumped 2.86 per cent to Rs 1,804. HCL Tech advanced 2.69 per cent to Rs 1,820.85. TechM added 2.68 per cent to Rs 1,676.95. The BSE IT index surged 2.84 per cent to 41,595.77 and was the top sectoral performer.
"The early results suggest that Donald Trump is leading the race (95-35), although any winning candidate would need at least 270 seats to call it a day. Going by the early results DT’s victory could likely result in more spending in the US, which could translate into inflation remaining somewhat elevated. At the same time, it would also mean stronger dollar but more trade barriers. However more than who wins, a clear result will be more of a relief to the markets which have been on a volatile mood predicting the outcome," Anitha Rangan, Economist at Equirus.
To recall, in the Trump's first term, from January 20, 2017 to January 20, 2021, IT stocks delivered strong gains, with TCS soaring 189 per cent, followed by Infosys (182 per cent), Wipro (148 per cent), HCL Tech (138 per cent) and Tech Mahindra (117 per cent), data compiled from corporate database AceEquity suggests.
Some midcap and smallcap IT stocks such as Mastek Ltd, Coforge Ltd and Tata Exlsi climbed up to 500 per cent during the four-year period.
JM Financial said Trump’s expansionary fiscal policy – cutting corporate tax rate to 15 per cent from 21 per cent for domestic production – could be positive for IT services demand, as it eases budgetary pressures. "To sum up, we believe Trump’s Presidency, while headline negative, will have limited impact on India IT Services players. Harris Presidency, on the other hand, will largely be status quo, in our view," it said.
At present, there are three bills associated with employment-based immigration, which are currently tabled in the US Congress. These bills aim to protect US workforce, while prioritising high skilled workers for employment-based immigration and improving the overall process. These could, at worst, increase compliance requirement for IT Services, JM Financial said while adding that US Presidential election might have limited bearing on the passage of these bills though.