Why is the Xero (ASX:XRO) share price leaping 5% today?

What’s lighting Xero on fire today?

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A cloud with a blue arrow pointing upwards through its middle symbolising a rising asx share price

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The S&P/ASX 200 Index (ASX: XJO) is enjoying a solid day of gains on the ASX boards so far this Thursday. At the time of writing, the ASX 200 is up a healthy 1.05% to 7,348 points. But that’s not quite as good as the Xero Limited (ASX: XRO) share price today.

Xero shares are currently up a pleasing 5% on the dot at the time of writing to $142.66 a share. That’s obviously a strong outperformance of the ASX 200 today. So why are Xero shares giving investors such strong gains?

Well, it’s not immediately clear what’s pushing Xero shares up so enthusiastically today. There are no news or announcements out of the company as of yet.

Xero shares join ASX tech surge

However, Xero is slotting into a clear trend that we are seeing on the share market this Thursday. Whilst the ASX 200 is in the green, it is ASX tech shares that seem to be doing most of the heavy lifting. Together with the ASX gold sector, tech shares are dominating the ASX 200’s gains today. The S&P/ASX All Technology Index (ASX: XTX) is up a robust 2.46% so far, with major constituents like Afterpay Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) all enjoying strong gains.

Afterpay and WiseTech Global in particular are very hot this Thursday. Afterpay shares are presently up by 4.73% to $120.96, an eerily similar figure to Xero. WiseTech is doing even better. This fellow WAAAXer is enjoying a massive 7.37% boost to $53.61 at the current time.

Despite all of these strong performances, there is not much in the way of major news out of any of them. This may indicate that we are seeing a market-wide appetite for ASX tech shares like Xero today. This sector did take the brunt of the market sell off we saw earlier this week. In fact, as my Fool colleague Kerry covered only back on Tuesday, these companies were all shedding between 3-6% on both Monday and Tuesday.

As tech shares, including the Xero share price often experience, it seems investors have gone from wanting nothing to do with them on Monday, to being desperate to add them by Thursday. Such is life on the ASX, one could say.

At Xero’s current share price, this cloud-based accounting software provider has a market capitalisation of $21.17 billion and a price-to-earnings (P/E) ratio of 1,095.

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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, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, WiseTech Global, and Xero. 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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