Pacific B usiness R eview I nternational
A Refereed Monthly International Journal of Management Indexed With THOMSON REUTERS(ESCI)
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Dr. S. RAJAMOHAN Professor Alagappa Institute of Management Alagappa University Karaikudi |
G. ARIVALAGAN Research scholar Alagappa Institute of Management Alagappa University Karaikudi |
This paper aims to study the Impact of the IT companies share in NSE. The researchers chose the selected companies from the IT sector in NSE. The study comprises the daily data of IT stocks closing price, trade quantity, turnover and number of thetrade from May 1, 2016, to February 28, 2017, which is collected from the National stock exchange web port. The researchers used paired sample t-test for to find the impact of IT share thepre-post implementation of the H1B visa ban. The researcher concluded that the respective stock prices are influenced by the H1B visa ban.
Keywords: Information technology, Stock, NSE, paired sample t-test
Information technology (IT) is playing an important role in India. India is one of the biggest IT capitals of the modern world and all the major players in the world IT sector are present in the country. India is the world largest sourcing destination for theIT. The Indian IT companies have been outsourcing their services to US companies and earning approximately more than 60 percentages of their revenue from the US market only. After theban, the H1B visa the market expert assumes that the Indian IT goes down because it brings new rules for outsourcing process. The US companies recruiting the H1B visa IT employees from India. The possible impact of ban H1B visa force the US Companies to give the employment opportunity to the US citizens. So that the US companies are reduced their outsourcing from the Indian IT companies. Due to this action, the share price of Indian IT companies is unstable in NSE. Hence, an attempt has been to study the H1B visa ban impact on major IT companies stock in NSE such as Tata Consultancy Services (TCS), Wipro, HCL, Tech-Mahindra and Infosys.
There are many IT companies listed on the NSE out of these companies, the researcher took only five major IT firms for this analysis. These five companies are having high outsourcing projects from the U.S such as TCS, WIPRO, HCL, Tech-Mahindra and Infosys. The daily closing price, trade quantity, trade volume and the number of trades are taken from May 1, 2016, to February 28, 2017. These data are collected from the NSEs official web port.
Hypothesis
H0: There is no mean difference between before and after H1B visa rules impact on IT share price, trade quantity, turnover and number of trades.
The paired sample T-test is a statistical procedure used to determine whether the mean difference between two sets of observations. In a paired sample t-test, each variable is measured twice, resulting in pairs of observations. It is used to measure the impact of a sample of data before and after completing the particular event.
Table 1. H1B Visa Ban IMPACT ON TCS STOCK
|
Variables |
Mean |
Std. Deviation |
Std. Error Mean |
95%Confidence Interval of the Difference |
T |
Df |
Sig. (2-tailed) |
Hypothesis Remarks |
||
|
Lower |
Upper |
|||||||||
|
Pair 1 |
Before and after TCS Close Price |
229.28 |
152.90 |
15.13 |
199.25 |
259.31 |
15.14 |
101 |
.000 |
Rejected |
|
Pair 2 |
Before and after TCS Traded Quantity |
-228189.80 |
973548.80 |
96395.69 |
-419412.93 |
-36966.67 |
-2.36 |
101 |
.020 |
Rejected |
|
Pair 3 |
Before and after TCS Turnover in Lacs |
-2909.54 |
23031.68 |
2280.47 |
-7433.40 |
1614.30 |
-1.27 |
101 |
.205 |
Accepted |
|
Pair 4 |
Before and after TCS No. of Trades |
-3652.57 |
41678.64 |
4126.80 |
-11839.04 |
4533.88 |
-.88 |
101 |
.378 |
Accepted |
Source: Author computation
Table 1 describes that the result of H1B visa ban impact on TCS stock. There are four variables have considered such as closing price, trade quantity, turnover and no of trades. The closing price and trade quantity of TCS have attained the significant value of less than the 0.05 percent. It indicates that the null hypothesis is rejected. The turnover and no of trades have the insignificant values. Therefore, it implies that the null hypothesis is accepted.
Table 2 H1B Visa Ban IMPACT ON WIPRO STOCK
|
Variables |
Mean |
Std. Deviation |
Std. Error Mean |
95% Confidence Interval of the Difference |
t |
df |
Sig(2-tailed) |
Hypothesis Remarks |
||
|
Lower |
Upper |
|||||||||
|
Pair 1 |
Before and after WIPRO Close Price |
65.73 |
33.24 |
3.29 |
72.26 |
72.26 |
19.96 |
101 |
.000 |
Rejected |
|
Pair 2 |
Before and after WIPRO Traded Quantity |
268368.02 |
1387802.59 |
137412.93 |
540958.31 |
540958.31 |
1.95 |
101 |
.054 |
Accepted |
|
Pair 3 |
Before and after WIPRO Turnover in Lacs |
2163.58 |
6872.54 |
680.48 |
3513.48 |
3513.48 |
3.17 |
101 |
.002 |
Rejected |
|
Pair 4 |
Before and after WIPRO No. of Trades |
911.127 |
28858.312 |
2857.399 |
6579.438 |
6579.438 |
.319 |
101 |
.750 |
Accepted |
Source: Author computation
Table 2 reveals the H1B visa ban impact on the Wipro stock. From the result, Wipro stock closing price and the turnover have less than the significant value of 0.05 percent. It indicates that U.S election result has influenced both variables. The Wipro trade quantity and the no of trade have not been influenced by H1B visa ban. Hence the two variables accept the null hypothesis.
Table 3 H1B Visa Ban IMPACT ON HCL STOCK
|
Variables |
Mean |
Std. Deviation |
Std. Error Mean |
95% Confidence Interval of the Difference |
t |
df |
Sig(2 tailed) |
Hypothesis Remarks |
||
|
Lower |
upper |
|||||||||
|
Pair 1 |
Before and after HCL Close Price |
-55.16 |
29.11 |
2.86 |
-60.85 |
-49.47 |
-19.22 |
102 |
.000 |
Rejected |
|
Pair 2 |
Before and after HCL Turnover in Lacs |
-1595730.65 |
882340.67 |
86939.61 |
-1768174.96 |
-1423286.35 |
-18.35 |
102 |
.000 |
Rejected |
|
Pair 3 |
Before and after HCL Turnover in Lacs |
3886.61 |
15261.90 |
1503.79 |
903.83 |
6869.39 |
2.58 |
102 |
.011 |
Accepted |
|
Pair 4 |
Before and after HCL No. of Trades |
48631.65408 |
28764.85099 |
2834.28499 |
43009.86325 |
54253.44491 |
17.158 |
102 |
.000 |
Rejected |
Source: Author computation
Table 3 describes the H1B visa ban impact on HCL stock. From the outcome of the result implies that the HCL stock closing price, trade quantity and no of trades have a significant value which is less than 0.05 percent. Hence the null hypothesis rejected. It confirms that the H1B visa ban influence above three variables of the HCL stock.
Table 4 H1B Visa Ban IMPACT ON HCL STOCK
|
Variables |
Mean |
Std. Deviation |
Std. Error Mean |
95% Confidence Interval of the Difference |
T |
df |
sig. (2-tailed) |
Hypothesis Remarks |
||
|
Lower |
Upper |
|||||||||
|
Pair 1 |
Before and after TEC-M Close Price |
32.60 |
43.26 |
4.28 |
24.10 |
41.10 |
7.61 |
101 |
.000 |
Rejected |
|
Pair 2 |
Before and after TEC M Traded Quantity |
-1490956.64 |
3437380.56 |
340351.39 |
-2166122.25 |
-815791.03 |
-4.38 |
101 |
.000 |
Rejected |
|
Pair 3 |
Before TEC M Turnover in Lacs |
-6336.81 |
16804.00 |
1663.84 |
-9637.43 |
-3036.19 |
-3.80 |
101 |
.000 |
Rejected |
|
Pair 4 |
Before and after TEC M No. of Trades |
-17661.51 |
30314.13 |
3001.54 |
-23615.77 |
-11707.24 |
-5.88 |
101 |
.000 |
Rejected |
Source: Author computation
Table 4 demonstrate the impact of the Tech Mahindra stock. From the result, all the variables are having the less than 0.05 percent significant value. Hence the null hypothesis has been rejected. It concludes that Tech Mahindra stock closing price, trade quantity, turnover and no of trades are influenced by the H1B visa ban.
Table 5 H1B Visa Ban IMPACT ON Infosys STOCK
|
Variables |
Mean |
Std. Deviation |
Std. Error Mean |
95% Confidence Interval of the Difference |
T |
df |
Sig(2 tailed) |
Hypothesis Remarks |
||
|
Lower |
upper |
|||||||||
|
Pair 1 |
Before and after Infosys Close Price |
151.43 |
77.29 |
7.65 |
136.25 |
166.61 |
19.79 |
101 |
.000 |
Rejected |
|
Pair 2 |
Before and after Infosys Traded Quantity |
-527154.22 |
3976884.13 |
393770.20 |
-1308288.380 |
253979.95 |
-1.34 |
101 |
.184 |
Accepted |
|
Pair 3 |
Before and after Infosys turnover in Lacs |
-231.38 |
41819.56 |
4140.75 |
-8445.52074 |
7982.76 |
.000 |
101 |
.956 |
Accepted |
|
Pair 4 |
Before and after Infosys No. of Trades |
-7422.490 |
86523.827 |
8567.136 |
-24417.383 |
9572.402 |
-.866 |
101 |
.388 |
Accepted |
Source: Author computation
Table 5 demonstrate the impact of the Infosys stock. From the result out of four variables, the Infosys closing price only has less than 0.05 percent significant value whether the other variables such as trade quantity, turnover and no of trades are insignificant. Hence the null hypothesis is accepted for this three variable. It concludes that H1B visa ban influenced the Infosys stock price only and other variables are trade quantity, turnover and no of trades have not been influenced.
From there results, the banning of H1B visa has affected the selected Indian IT companies share prices. The trade quantity of the TCS, HCL and Tech –Mahindra were influenced by the H1B visa ban and it did not influence the Wipro and Infosys. The H1B visa Ban has not influenced the turnover volume of the TCS, HCL, but it influences the Wipro and Tech-Mahindra. The no of trades of all IT companies’ shares is influenced by the H1B visa ban except Tech-Mahindra. The H1B visa ban is an external factor for the Indian stock market. In the current scenario, the government of India introduce the make in India and Digital India scheme. These two schemes are established for developing the technology of the country and also change the market conditions also in future. Hence, the researchers concluded, that persons who are having the open position of these shares that investors hold their share for long term period.
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