It finally looks set to be a good day for Australian tech shares on Wednesday.
This follows a very positive session on Wall Street's technology-focused Nasdaq index overnight.
What happened?
Investors were fighting to buy beaten down US tech stocks after bond yields declined on Tuesday.
According to CNBC, the US 10-year Treasury yield fell more than 6 basis points to 1.52% yesterday. This means the benchmark rate is now down 10 basis points from its Monday high of 1.62%.
The tech-heavy Nasdaq Composite index climbed over 4.1% overnight thanks to very strong gains by giants such as Amazon, Apple, Facebook, and Tesla. The latter was a particularly positive performer, wiping out almost five days of declines by rising over 20%.
Vital Knowledge's Founder, Adam Crisafulli, commented: "After lagging badly for the last few weeks, growth/momentum stocks are exploding higher as investors grow a bit more comfortable around rates and step in to buy this erstwhile most-loved sector."
Will this rebound be sustained?
Miller Tabak's Chief Market Strategist, Matt Maley, appears cautious on the rebound and unsure whether it is going to last.
Mr Maley said: "A lot of these tech stocks have become oversold on a short-term basis. Therefore, it's not a big surprise that they're seeing a nice bounce. The question will be whether this bounce is a strong one…or a 'dead cat bounce' that doesn't last very long at all."
But one thing that is for sure, is that it looks set to be a very good day of trade for beaten down Australian tech shares such as Afterpay Ltd (ASX: APT), Altium Limited (ASX: ALU), and Zip Co Limited (ASX: Z1P) on Wednesday.
With their shares down heavily over the last month, as outlined here, they look likely to follow the lead of their US counterparts and rebound strongly today.
