IT stocks on the JSE rose today to catch up with last night`s US market rally that was led by technology and blue-chip stocks as investors bet on a quick war in the Middle East.
The Nasdaq Composite Index rose 51.94 points or 3.88% to 1 392.27 while the Dow Jones industrial average soared 282.21 points or 3.59% to 8 141.92.
Weeks of uncertainty on global markets came to an end last night as US president George Bush gave Iraqi leader Saddam Hussein and his sons 48 hours to leave Iraq or face military action.
The JSE, which closed before Bush`s speech, ended yesterday 33 points or 0.4% down at 8 047. Declining issues outnumbered advancing issues 168 to 96 with 90 issues unchanged. Technology and related stocks on the JSE did not escape the weakness.
However, there was more green than red on the tech boards today as stocks took heart from their offshore counterparts with Asian and European markets climbing, driven in part by tech rallies. The JSE`s IT index was up 2.69% at 3 569.96 by 3pm.
Analysts say although the local market is playing catch-up, it will most likely now look to offshore markets for direction.
They say the markets are expecting a quick end to a war that now seems inevitable, as investors are buying shares in the hope of a recovery once the crisis ends.
However, the effect on local technology shares, particularly in groups with global operations, will depend on how long the conflict lasts.
"Certainly in the short-term no one involved is going to want to spend money on things like building networks, but assuming that the US has its way, Saddam Hussein is removed from power and the war ends, there should be more spending as they try to get things back to normal."
One analyst says another variable is the possibility that Saddam will take the conflict out of Iraq as he has threatened and strikes at soft US targets. "Then we could be faced with a different story. Another thing to consider is that after the war, with the split in Europe and even in the UN, the face of international relations could be different, and that will bring its own uncertainty."
Says one analyst: "In the short-term, the war`s not going to be good. But if it ends without blowing up the whole world then we can expect renewed spending in a bid to get back to normality and on a growth curve."
Among the gainers today were Altech (up 40c or 2.04% at 2 000c), Aplitec (up 3c or 0.93% at 326c), Bytes (up 9c or 2.64% at 350c), Compclear (up 5c or 4.55% at 115c), Comparex (up 5c or 0.83% at 605c), DiData (up 4c or 2.94c at 210c), IST (up 5c or 5% at 105c), Mustek (up 10c or 2.27% at 450c), Reunert (up 50c or 2.94% at 1 750c), Telkom (up 24c or 0.85% at 2 840c) and Uniserv (up 74c or 3.25% at 2 349c).
However, decliners include FrontRange (down 1c or 0.9% at 110c), Faritec (down 4c or 13.33% at 26c), Jasco (down 3c or 1.9% at 155c), MGX (down 20c or 22.22% at 70c) and Softline (down 1c or 0.93% at 107c).
Most of the major JSE indices were also up, with the all share index up 3.14% at 8 300.32. Financials were up 3.03%, industrials up 3.5% and resources up 2.96%. The gold mining index bucked the trend, losing 2.8%.
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