JSE IT shares plunged this morning as the local market tracked its overseas counterparts, fretted about the Middle East and worried that the latest info-tech bubble may be over before it really got started.
Adding to the woes was rand strength that hammered shares with exposure to dollar-based revenues. The local currency was last seen at R6.52/$, a gain of 0.25c.
By 10.49am, the all IT index had nose-dived 271.11 points, or 3.69%, to 7 067.46 as the all share index had dropped 97 points, or 0.9%, to 10 718.86. The two sub-components of the IT index showed uneven losses. The hardware index was off 3.43 points, or 0.8%, at 426.82, but the software computer and services index had deflated by 6.78 points, or 4.47%, to 144.90.
Telecommunications shares edged up 0.83 points to 704.67.
JSE analysts say that talk about a recovery in IT spend being more muted than previously thought had weighed on investor sentiment. The geopolitical crisis in the Middle East had increased the perception of risk, and heightened fear and losses on Wall Street had given the final push.
On Monday, when the JSE was closed due to a public holiday, the Dow Jones Industrial Average closed down 121.85 points, or 1.2%, to 10 064.75; the technology-laden Nasdaq Composite was down 30.56 points, or 1.57%, at 1 909.91; and the Standard & Poors 500 ditched 14.34 points, or 1.29%, to 1 095.44.
"Tech shares are taking it hard and since many are in the software and services index, the losses are felt there," one analyst says.
Heavyweight IT shares that fell included Dimension Data, which lost 27c, or 6.21%, to 408c. Comparex ditched 20c, or 4.21%, to 455c. However, Datacentrix bucked the trend by rising 5c, or 2.78%, to 185c.
Telkom was little changed at R73.20 despite issuing a trading statement saying it expected a substantial rise in its year-end results for the 12 months ended 31 March 2004.
Cellphone operator MTN, which has already issued a similar statement, rose 15c to R32.65.
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