Technology stocks on the JSE were showing signs of recovery this morning after bearing the brunt of yesterday`s market weakness.
The JSE`s all share index lost 91 points or 0.88% to end yesterday`s session at 10 222 after a little more than 212.7 million shares worth about R2.72 billion were traded in 17 796 deals.
The markets changed direction this morning, with the IT index up 2.42% at 6 714. The software and computer services sector was up 2.63% at 155, although the IT hardware sector was down 0.17% at 169.
Dealers say the swing is mainly in reaction to last night`s gains in the US, with the Nasdaq up 2.1% at 1 374.43. The S&P 500 closed 0.8% higher at 927.37.
Intel led the S&P 500 upward move as the index recovered from earlier losses. There were rumours in the market that Intel would make a positive announcement or a bearish analyst might change his opinion on the stock.
Good news came from Dell Computer, which says its second-quarter earnings and revenue will be modestly better than originally expected, thanks mainly to gains in market share.
Yahoo shares also rose almost 6% as second-quarter results were tempered by concerns that its stock was too high.
By late this morning, Comparex was trading 1.1% up at 748c, Dimension Data was up 3.85% at 540c, Datatec was 3.85% higher at 1 350c and AST was 7.7% up at 70c.
Dealers said that yesterday, negative sentiment weighed heavily on the market as a result of volatility in the US, caused by another accounting investigation - this time at pharmaceutical group Bristol Myers Squibb - and mixed economic data.
Although the local market fared considerably better than its European and Asian counterparts, technology stocks were worst hit, with the JSE`s IT index losing 3.66% by the close.
An analyst says that with negative sentiment already weighing on the IT sector, the general market weakness was bound to be more noticeable there.
Networking and IT services group Datatec lost 90c or 6.5% to 1 300c.
Dimension Data fell 26c or 4.8% to close at 520c. This is despite Merrill Lynch upgrading networking group Cisco to a "strong buy" from a "buy". Merrill says fundamentals at the group are improving, it is on track for its fourth quarter, and leading indicators are pointing to a recovery in equipment orders in the second half of the year.
Dimension Data is a major Cisco reseller.
Comparex fell 14c or 1.9% to end at 740c.
Some stocks managed to buck the trend. Among them, MGX gained 10c or 1.23% to 820c. AST Group, which lost 1c to close at 64c, was one of the most active stocks on the JSE yesterday. About 2.4 million shares changed hands in 141 deals.
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