SARAH BULLEN, Cape Town | Tuesday 5.20pm.
SHARES dropped back after an early rally on Tuesday, closing weaker as the all share index dipped below the 8000 mark. This is the first time the index has retreated below the 8000 mark since early December.
Analysts attribute the fall largely to a correction in resource shares, which have fallen out of favour after a heady rise fuelled by expectations of sharply higher commodity prices.
The fall came despite strong international markets and a strong start to the day. Dealers said that a correction after the market’s strong millennium surge — now widely regarded as too far, too fast — coupled with low expectations about the pospects for interest rate cuts was also seen weighing on the market.
Dragging the market lower were resource and IT counters — with losses in heavyweights such as Dimension Data, Comparex, Anglo American and De Beers. At close of trade the industrial index had lost 0,61% and the financial index 0,70%.
Only the all gold index closed in positive territory with a 1,12% gain. Its rally came after bullion gained over $2 an ounce since the JSE closed on Monday and was trading at $294,50 an ounce at 4.45pm.
Dealers said, however, the market should get a lift on Wednesday if the Dow Jones Industrial Average rallies overnight. — additional reporting by Reuters