Technology services company shares dipped on Monday after the Trump administration announced it would temporarily suspend expedited applications for H-1B visas widely used by foreign tech workers.
U.S. Shares of Indian IT company Infosys fell 1.2% and Wipro edged down 0.2% after the U.S. Citizenship and Immigration Services (USCIS) said on Friday that it would suspend “premium processing” of the visas for up to six months.
New York-based Cognizant Technology Solutions dipped 1.7%.
Following President Donald Trump’s election in November, Infosys and Wipro sold off due to concerns he would keep promises to crack down on immigrants who he said were taking jobs from U.S. Citizens.
But the companies’ shares have mostly recovered due to growing expectations among investors that any potential change to the H-1B visa program would happen via a lengthy legislative process and not through a quick executive order.
“The longer time it takes, the longer the regulators and politicians will have to do their homework to understand the impact of their acts,” said Wedbush Securities analyst Moshe Katri.
Infosys, Wipro and other Indian IT companies serving U.S. Corporations are among the largest sponsors for H-1B visas, using them to employ programmers and other technology workers.
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Banks are key customers of those IT companies and could increase spending if Trump makes good on promises to cut corporate taxes and reduce financial regulation, Katri added.
Short interest in Infosys in mid-February rose to 2.8% of outstanding shares, its highest level in about two years, according to Thomson Reuters data.
USCIS said that suspending premium processing will allow it to reduce a backlog of long-pending visa petitions and thus reduce overall H-1B processing times.