Why the Afterpay (ASX:APT) share price is starting the week on a high

ASX tech shares are buoyant on the back of positive movement in the US markets.

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The S&P/ASX 200 Index (ASX: XJO) has had an interesting start to the trading week. At the time of writing, the ASX 200 is looking at a loss, down 0.07% to 7,290.6 points after initially rising strongly this morning.

Among the best performing ASX 200 shares so far today is Afterpay Ltd (ASX: APT). The Afterpay share price is currently up a healthy 1.8% to $96.18, after rising almost 4% earlier today. As you might have gathered, that’s significant outperformance of the broader market today.

So why is Afterpay suddenly in demand? As you may remember from last week, Afterpay was not doing a whole lot, even though the ASX 200 was rising strongly and making new all-time highs. So what’s changed?

ASX tech shares in demand

Well, today’s move looks like nothing to do with Afterpay itself, seeing as there is no major news out of the company. Instead, it’s likely to be reacting to a strong showing from the US markets last week.

On Friday night (our time), the US NASDAQ-100 (NASDAQ: NDX) had an extremely positive session, rising 1.78% to 13,771 points, putting it within 2% of its all-time high. The Nasdaq is a tech-heavy index and thus tends to reflect a broader market sentiment over tech shares in general. And that seems to be spilling over into Afterpay shares this morning.

It’s not just Afterpay either. We are seeing similar moves across many popular ASX tech shares today. Appen Ltd (ASX: APX) shares are up 4.82% today to $12.83. The WiseTech Global Ltd (ASX: WTC) share price is up 2.94% today to $29.40. And the Nuix Ltd (ASX: NXL) share price, which had a clanger of a week last week, is up a hefty 6.56% to $2.76. Indeed, the entire S&P/ASX All Technology Index (ASX: XTX) is up a substantial 1.34% this morning.

About the Afterpay share price

The Afterpay share price has spent 2021 on something of a roller coaster ride. After rising by more than 30% year to date and topping out at an all-time high of $160.05 per share back in February, Afterpay shares have been on a slide ever since.

Even at today’s prices, the company’s share price is still down by around 18% year to date and down by around 39% from its February peak. At the current share price, Afterpay has a market capitalisation of $28 billion.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Appen Ltd, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Appen Ltd, and WiseTech Global. The Motley Fool Australia has recommended Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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