Here’s why ASX 200 tech shares are having such a stellar end to the week

These ASX tech shares are outperforming on Friday.

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Key points

  • ASX 200 tech shares are outperforming all other sector's on Friday, gaining more than 2%
  • Among its leaders are shares in Novonix, Computershare, and Xero, as well as embattled stocks, EML Payments and Life360
  • Today's performance from the ASX tech sector is likely due to a strong session on the Nasdaq Index overnight

S&P/ASX 200 Index (ASX: XJO) tech shares are continuing to rebound after their rough start to the week amid a strong session overseas.

The tech-heavy Nasdaq Index took off overnight, with the Nasdaq-100 recording a 3.48% gain for Thursday’s session. Though, it might be giving some of its gains back later today.

Likely in reaction, the S&P/ASX 200 Information Technology Index (ASX: XIJ) is boasting a 1.74% increase on Friday, helping it to recover some of its losses from earlier in the week.

For context, the ASX 200 is currently 0.68% higher.

Let’s take a closer look at what might be going on with ASX 200 tech shares on Friday.

What’s driving ASX 200 tech shares higher?

The ASX 200 tech sector is leading the index on Friday, with the EML Payments Ltd (ASX: EML) share price coming in as its top performer.

The payments provider’s stock plummeted 38.5% on Tuesday after the company downgraded its guidance. Today, it’s back in the green, gaining 5.34% amid the release of its response to an ASX query regarding Tuesday’s news.

The Life360 Inc (ASX: 360) share price is on a similar trajectory. It’s up 4.86% today following Wednesday’s 29.4% tumble.

Other ASX 200 tech stocks in the green today include Novonix Ltd (ASX: NVX), Computershare Limited (ASX: CPU), and Xero Limited (ASX: XRO).

They’ve gained 3.52%, 2.73%, and 1.81% respectively.

Looking to the broader ASX tech sector, the S&P/ASX All Technology Index (ASX: XTX) is currently up 1.79%.

The sector’s performance follows a similarly strong session on the tech-heavy Nasdaq Index overnight.

Most of Australia woke up to the Nasdaq-100 boasting a 3.48% gain. But tomorrow’s session overseas might not be so pretty.

The Nasdaq Index struggled in after-hours trade on Thursday evening, reports my international colleague.

Its slump was driven by tech giants, Apple Inc (NASDAQ: APPL) and Amazon.com Inc (NASDAQ: AMZN). The pair both released quarterly earnings on Thursday.

If ASX 200 tech shares can hold onto their current gains, the sector will close Friday’s session 2.1% lower than it was at end of last week.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, EML Payments, Life360, Inc., and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended EML Payments and Xero. The Motley Fool Australia has recommended Amazon and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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