Glitch! Why are ASX tech shares getting hammered on Monday?

ASX tech shares are taking a beating today…

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published March 7, 2022 3:11 pm AEDT

The S&P/ASX 200 Index (ASX: XJO) is taking a bit of a hammering so far this Monday. At the time of writing, the ASX 200 is down by a disappointing 0.97% at just over 7,000 points. But ASX tech shares are once again faring far worse.

The ASX tech sector is currently the worst-performing ASX 200 sector by far. And we have certainly seen some dramatic moves amongst its most famous constituents. Take Block Inc CDI (ASX: SQ2), the new owner of Afterpay. Block shares are currently down a notable 11.05%.

We've seen a 3.2% slide in Zip Co Ltd (ASX: Z1P) shares, which also saw a new 52-week low of $1.62 a share this morning. Life360 Inc (ASX: 360) has lost more than 8% so far today, while EML Payments Ltd (ASX: EML) and Megaport Ltd (ASX: MP1) are down by 4.6% and 5.5% respectively.

Altium Limited (ASX: ALU) and WiseTech Global Ltd (ASX: WTC) have both lost more than 2.5%. And Appen Ltd (ASX: APX) has lost more than 4.5%.

You get the idea.

A man smashes open a piggy bank with a hammer representing an ASIC fine received by Westpac — Image source: Getty Images

Why are ASX tech shares getting hammered today?

So why are ASX tech shares bearing the brunt of today's sell off? Well, there's no easy answer, unfortunately. However, it is typical for ASX tech shares to react in a more volatile fashion than the broader market during both strong and weak markets.

We often see tech shares like those listed above, enjoy outsized gains when the market is green. But conversely, we often see carnage in this space on days like today where there are broad selling pressures across the share market. As such, today's moves might be painful, but they are not exactly abnormal.

Another factor to consider is the US markets. According to the Australian Financial Review (AFR), futures markets for the Nasdaq 100 Index are currently pointing to a 2% slide when the markets open early tomorrow morning (our time). The Nasdaq is known as the US's tech-heavy index, so ASX tech investors often take cues from what this market is doing.

Whatever the underlying cause for today's sell off, there's no doubt it has been a painful day for ASX tech shares, and their investors.

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