Information technology stocks dragged the South African bourse lower in opening trade on Friday, but the gold sector lent support on a firmer bullion price, traders said.
By 0758 GMT, the key all-share index had shed 0,36% or 40,3 points at 11,114.60, as investors locked in profits in the IT sector after the technology-rich Nasdaq index dropped 2,53% on Thursday.
”IT stocks are dragging the market lower, and we will have been a lot lower if it was not for gold stocks, which are firmer on the higher gold price,” said Eddie Monale, a trader at Legae Securities.
The country’s largest IT company Dimension Data tumbled 8,7% to a new-year low of 720 cents, with dealers saying a profit warning from technology bellwether Intel Corp had slammed the stock.
South Africa’s second largest IT firm Datatec fell 3,8% or 70 cents to R17,60 – slightly outperforming the IT index, which gave up 4,7%.
”Apart from weakness in the United States overnight, there’s no particular reason why Didata has been hit hard,” said one analyst.
”There’s just been more negative news around Didata than Datatec lately, so in a down market Didata would suffer a bit more.”
Gold stocks once more provided a shiny spot on the gloomy broader market.
The country’s second-largest gold miner Gold Fields, which has more than doubled its market value this year, climbed 3,6% to R134,40. Harmony gained 3,2% to R160.
Spot gold was last trading at $326.80 an ounce, higher than New York’s last quoted $324,75/5.25 and London’s late fix at $324,10. – Reuters