The IT index, at the mercy of slipping global stock markets, has fallen to levels last seen in October last year.
At 5 723.67 points yesterday, the index was 35% off its highest close of the year. On 20 January it ended the day at 8 836.52. The sector has lost 23% since the start of the year.
The telecommunication services index lost 6.95 to close at 637.5 yesterday, although this is still up on the 623.2 at which it opened at the start of the year.
An analyst says the sector has been at the mercy of global markets, mainly the US`s tech-heavy Nasdaq. "It`s a pity it`s like that, but it does track Nasdaq, and Nasdaq has been taking a bit of strain," he says.
Yesterday the Nasdaq Composite Index lost 10.07 points to end at 1 839.02, touching a new low for the year. Dealers say although there have been some strong corporate results, the mood is dominated by worries that profits in the second half will not meet expectations.
Other international markets have also not fared well. London`s FTSE 100 lost 39.3 points to close at 4 287, the first time since last year that it ended lower than 4 300. The main losers there were cellular telephony group Vodafone and banking stock Abbey National.
Dealers say investors are also selling technology stocks and replacing them with less risky investments. Markets in the Far East were also hit by US tech stock jitters.
An analyst says one of the local IT index`s main vulnerabilities is that there are not enough heavyweight stocks. "Dimension Data is still the biggest one. There are one or two others, but the rest are so small that they don`t have much influence," he says.
However, the JSE overall has not been exciting this month, he notes. "The market in general has been seeing some pretty low volumes. There haven`t been any significant results out and nothing major happening at all.
"In August we`re going to see results from some large companies. Hopefully they will be good enough to breathe some life into the market."
However, he was not yet prepared to predict when the IT index would turn. "Datatec`s chairman (Leslie Boyd) said in the annual report that there are signs that the market is recovering," he says. "But it`s taking time to recover."
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