Gloomy news from chipmaker Intel dragged tech stocks down in early morning trade today. Local benchmark Dimension Data was hardest hit, slipping to a new year-low of 720c.
Late on Thursday Intel lowered its revenue guidance and warned investors it had cut its gross margin forecast to 49% from the 53% it had previously forecast.
The chip manufacturer blamed reduced demand in its European operations for the revision and the Intel counter was severely punished.
As usual, local counters took their lead from their international counterparts and Dimension Data took a tumble on the opening of the Johannesburg markets, losing 8.7% to reach a new year-low of 720c soon after the opening of trade.
Datatec followed suit, dropping 3.8% or 70c to R17.60 according to Reuters.
By 11:00 today the IT index had given up 5.22% and volumes in the Didata stock topped the scales at 4.5 million shares traded by mid-morning.
The Dimension Data share has had an unhappy time of late, dropping significantly after it released a profit warning for its Asian subsidiary Datacraft, and now losing the ground it had gained since.
European stocks were also heavily hit by the news from Intel and the European Tech index hit lows last seen after the September 11 attacks in the United States.
Global markets were waiting for direction from the Nasdaq opening this afternoon, although it remains to be seen how much trade will flow through the local markets as traders are lured away by the England versus Argentina World Cup football, kicking off shortly after lunch.
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