Tech shares leading ASX 200 (ASX:XJO) losses on Thursday

ASX 200 tech shares are taking a beating on Thursday.

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The S&P/ASX 200 Index (ASX: XJO) has tumbled 1.68% in late afternoon trade to a 1-month low of 7,383.

The tech sector is taking the brunt of today’s selloff, with the S&P/ASX Information Technology (INDEXASX: XIJ) index down 2.61%.

Thursday’s largest tech losers

Megaport Ltd (ASX: MP1) is leading today’s selloff, down 4.36% to $16.50.

Not far behind include ASX 200 tech heavyweights Xero Limited (ASX: XRO), Seek Limited (ASX: SEK) and Carsales.Com Ltd (ASX: CAR) sliding 4%, 3.90% and 3.50% respectively.

The BNPL sector is also crating under today’s selling pressure with Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL) down a respective 2.32%, 2.33% and 0.91%.

What’s driving the ASX 200 lower?

The ASX 200 has taken off after Wall Street following more signs of a slowing US economy.

According to CNBC, the US Federal Reserve reported that growth overall had “downshifted slightly to a moderate pace”.

The report said that “The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most districts, reflecting safety concerns due to the rise of the delta variant, and, in a few cases, international travel restrictions.”

In addition, CNBC flagged that the Federal Reserve has indicated that it is likely to begin withdrawing some of its stimulus policies before year-end.

Back at home, the commentary from the Reserve Bank of Australia (RBA) is relatively consistent.

In the RBA’s September monetary policy media release, it said that:

The recovery in the Australian economy has, however, been interrupted by the Delta outbreak and the associated restrictions on activity. GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months.

However, unlike the Fed, the RBA plans to keep “very accommodative financial conditions” in place to support the recovery of the Australian economy.

The Board’s decision to extend the bond purchases at $4 billion a week until at least February 2022 reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak.

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Motley Fool contributor Kerry Sun 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, MEGAPORT FPO, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended MEGAPORT FPO, SEEK Limited, and Limited. 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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