The Nearmap Ltd (ASX: NEA) share price has found some much-needed relief today as it rebounded alongside the ASX tech sector.
Shares in the aerial mapping company shot up 8.6% to a one-week high of $1.21 in after lunch trade. The Nearmap share price was trading at $1.19, up 7.2% at the close of trade on Friday.
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ASX tech shares rebound
The outperformance comes as other IT shares on the S&P/ASX 200 Index (ASX: XJO) staged a 6.2% bounce – making the sector the top performer on the index on Friday.
Other ASX tech shares that surged by 8% or more today include Xero Limited (ASX: XRO), up 9% at the close; Brainchip Holdings Ltd (ASX: BRN), which jumped as high as $1.15 before closing at $1.12; and Block Inc CDI (ASX: SQ2), up 14.6% at the close.
What's happening to the Nearmap share price?
The Nearmap share price has been heavily sold off along with its peers, more recently off the back of rising interest rates.
Higher borrowing costs depress the valuation of shares – particularly growth shares such as tech companies that trade on lofty multiples.
But the prediction by the Commonwealth Bank of Australia (ASX: CBA) boss Matt Comyn that interest rates won't rise as much as the market is currently pricing, is a welcome relief to tech investors.
Comyn thinks rates could rise by another 100 basis points (bps), or 1 percentage point, instead of 200 bps as many economists are tipping.
If he's right, the embattled ASX tech sector could find its feet sooner than the market is expecting.
Nearmap share price dives despite positive earnings news
Other good news for the Nearmap share price comes in the shape of its recent positive earnings update. Management said last month the company generated more than US$2 million in incremental annual contract value (ACV) from its government portfolio in North America in the March quarter alone.
This followed Nearmap's report that its total ACV hit $150 million for the first time in its history.
The trading update should alleviate fears that growth is slowing, although these positive messages have been lost in the latest blood-curling market sell-off.
Foolish takeaway
Having said that, no one can say with any certainty if the painful correction in ASX tech shares is close to running its course.
At least investors know they won't be buying the Nearmap share price at the peak of the market given that the shares have collapsed by more than 30% over the past year.
