The IT index continued its downward trend on the JSE this morning after yesterday reaching its lowest level so far this year.
All the JSE`s major indices closed down yesterday with telecommunication services the biggest loser, closing 6.52% down at 600 points.
The IT index lost 3.72% to end the day at 6 935 points, its lowest level since late December. The lowest previous close this year was 6 998, recorded in early January.
European and US markets were the main factor driving share prices down, with the US`s Dow Jones Industrial Average closing below the psychologically important 10 000 level for the first time since December as a result of fears that US interest rates will be raised in June.
The Nasdaq Composite Index lost 1.14% to close the day at 1 087 while the UK`s FTSE 100 lost 2.29% to end at 4 395. Germany`s DAX closed 2.85% down at 3 784 and the French CAC 40 lost 2.73% to close at 3 553.
By late morning today the local IT index was down further at 6 928 while the telecommunication services index was at 597 points.
However, US-based independent research firm Technology Tracker says there is a ray of hope for the technology sector, with hiring in the US on the upturn and IT projects also increasing.
The group says that tech stocks have been trailing the broad market averages, but it quotes Thomas Smith, Standard & Poor`s senior investment officer, as saying that the softness in the sector is the result of investors discounting good earnings reports and worrying about the impact of an interest rate hike.
However, he notes that the second half of the year normally brings strong sales.
Technology Tracker also cites a report from Robert Half Technology, which says 55% of more than 1 400 chief information officers in the US said the number of projects in their IT departments had increased in the past year.
Eleven percent of the CIOs interviewed for the report say they plan to add full-time staff to their IT departments this quarter, while 2% expect staff cuts and 87% expect to maintain current staff levels.
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