The S&P/ASX 200 Index (ASX: XJO) is having a positive, if bouncy, day of trading so far this Friday. At the time of writing, the ASX 200 is up a healthy 0.35% at over 7,270 points. But the Zip Co Ltd (ASX: Z1P) share price is doing one better.
Zip shares are having a strong day today thus far, having risen a healthy 4.9% at the time of writing to $1.65 a share. That puts this buy now, pay later (BNPL) company's gains since Tuesday afternoon at a very pleasing 17% or so.
So why is the Zip share price having such a strong run this week?
Zip share price surges on tech rally
Well, the first thing to note is that the market is having a strong run itself. Fresh from the tumult of the past couple of weeks, ASX shares seem to have found their footing more recently. Since 8 March, the ASX 200 is itself up by a robust 4.2%.
Due to Zip's reputation as a growth and tech share, its share price moves are often a magnification of what the broader market is doing. In addition, as a tech share, Zip often takes its cues from what is happening on the US markets, particularly the tech-heavy Nasdaq Index. And the Nasdaq has had a couple of strong days recently as well. Since Monday alone, it has gained more than 8%.
The US Federal Reserve's interest rate decision this week also appears to have been cheered on by investors in this space. That might be why we are seeing Zip shoot up this week in such a decisive manner. It's not just Zip either. Other ASX tech shares such as Block Inc CDI (ASX: SQ2), Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) have also rocked in recent days.
But unfortunately, this move for Zip shares hasn't been enough to make up for the company's rather dreadful share price performance of late. Even after today's gains, Zip remains down more than 61% in 2022 so far. It also remains down by more than 80% over the past year.
At the current Zip share price, this ASX 200 BNPL share has a market capitalisation of $1.11 billion.
