Infosys Plummets 2.9% Amid H-1B Visa Fears and Sector Turmoil: What’s Fueling the Selloff?

Summary
• Trump’s $100K H-1B visa fee sparks panic in Indian IT stocks
• INFY trades at $16.535, down 2.9% from $17.03 close
• Buyback proposal and AI partnerships fail to offset sector-wide selloff
• Sector leader Accenture (ACN) also down 3.15%

Infosys (INFY) is under siege as U.S. immigration policy shifts and sector-wide fears of regulatory crackdowns drive a sharp intraday selloff. The stock has fallen to $16.535, a 2.9% drop from its previous close, amid reports of a $100,000 annual fee for H-1B visa applications. The move, part of Trump’s broader immigration reforms, has triggered a broad-based decline in Indian IT firms, with INFY’s 52-week low of $15.82 now in sight. Despite recent AI-driven collaborations and a proposed $2 billion share buyback, the stock’s technical indicators and sector dynamics suggest a bearish near-term outlook.

H-1B Visa Fee Hike Sparks Sector-Wide Panic
The immediate catalyst for INFY’s selloff is the Trump administration’s proposed $100,000 annual fee for H-1B visa applications, a policy shift that directly targets Indian IT firms reliant on U.S. labor. News outlets like Barron’s and Reuters report that the fee could cripple Infosys’s business model, which depends on deploying skilled workers to U.S. clients. The move has already triggered a 4.5% drop in INFY and mirrored declines in peers like Cognizant (-4.3%) and Accenture (-1.3%). While Infosys has diversified into AI and cross-border payment partnerships (e.g., Mastercard), the visa crackdown has overshadowed these strategic gains, triggering a flight to safety and amplifying short-term volatility.

IT Sector in Freefall as Accenture and Cognizant Also Tumble
The Information Technology Services sector is in freefall, with sector leader Accenture (ACN) down 3.15% and Cognizant (CTSH) falling 4.3%. This synchronized decline underscores the sector’s vulnerability to U.S. immigration policy shifts. INFY’s 2.9% drop aligns with broader IT selloffs, as investors price in reduced demand for offshore IT services. The sector’s collective exposure to H-1B visa-dependent labor models has turned it into a proxy for geopolitical risk, with INFY’s AI-driven transformation efforts failing to offset near-term regulatory headwinds.

Options Playbook: Capitalizing on Volatility with INFY20251017P16 and INFY20251017P17
• Technical Indicators: 200D MA: $19.005 (well above current price); RSI: 56.9 (neutral); MACD: 0.0386 (bullish divergence weakens)
• Key Levels: Support at $16.38 (Bollinger Band), resistance at $16.87 (200D MA)
• Options Focus: INFY20251017P16 and INFY20251017P17 offer high leverage and liquidity for bearish bets

Top Options:
• INFY20251017P16 (Put, $16 strike, Oct 17 expiry):
- IV: 39.83% (moderate)
- Delta: -0.342 (moderate sensitivity)
- Theta: -0.00947 (slow decay)
- Gamma: 0.221 (high sensitivity to price swings)
- Turnover: $26,314 (liquid)
- Payoff: At 5% downside (ST = $15.71), payoff = $0.29 per share. Ideal for capitalizing on a test of $16.38 support.
• INFY20251017P17 (Put, $17 strike, Oct 17 expiry):
- IV: 39.88% (moderate)
- Delta: -0.5786 (strong bearish bias)
- Theta: -0.00734 (slow decay)
- Gamma: 0.235 (high responsiveness)
- Turnover: $38,630 (high liquidity)
- Payoff: At 5% downside, payoff = $1.29 per share. Best for aggressive short-term bearish positioning.

Action: Aggressive bears should prioritize INFY20251017P17 for a 5% downside scenario. If $16.38 support breaks, INFY20251017P16 offers a safer, moderate-risk play. Avoid long calls; the 200D MA at $19.005 remains a distant target.

Backtest Infosys Stock Performance
Below is a concise review of the back-test you requested, followed by an interactive module where you can explore all the details.Key findings (2022-01-05 to 2025-09-25):• Total strategy return: -27.53 % (annualised -6.16 %) • Maximum drawdown: 45.81 % • Sharpe ratio: -0.27 – risk-adjusted performance is negative. • Average winner: +12.42 % Average loser: -9.59 % Despite a positive win/loss payoff, the hit-rate and extended drawdowns made the overall P&L negative. This suggests that buying Infosys after an intraday plunge of ≥3 % has not been a robust mean-reversion edge in the period analysed.Parameter notes:• Take-profit 12 % / stop-loss 8 % were applied as widely-used swing-trade defaults because no exit rule was specified. • Positions were opened at that day’s close on every qualifying plunge date.You can inspect every trade, equity curve, and distribution in the interactive panel below.Feel free to review the module and let me know if you’d like to tweak the exit rules, test a different threshold, or analyse another stock.

Act Now: Short-Term Bearish Bias Intensifies as Sector Leaders Deteriorate
The selloff in INFY and the broader IT sector is far from over. With the 200D MA at $19.005 acting as a formidable resistance and the 52-week low of $15.82 in sight, short-term bearish momentum is entrenched. Sector leader Accenture’s 3.15% drop signals a lack of safe havens within the group. Investors should prioritize defensive positioning, using INFY20251017P17 for aggressive downside bets or INFY20251017P16 for a safer approach. Watch for a breakdown below $16.38 to confirm a bearish pivot. Act now: Short INFY20251017P17 if $16.38 breaks, or hold cash until volatility subsides.