Why did the Zip share price just pop then drop?

The Zip share price took off this morning before tumbling this afternoon. Could this be why?

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Key points

  • The Zip share price rose 5% to its intraday high before tumbling to trade 4% lower than its previous close
  • It came as the ASX 200 experienced similar action, surging higher before being subdued amid data out of China
  • While the Zip share price is now trading in the red, the tech sector is still boasting a smaller but still notable gain

The Zip Co Ltd (ASX: ZIP) share price followed the broader market up this morning before plummeting upon its fumble this afternoon.

The buy now, pay later giant’s stock surged 5.55% earlier today, reaching an intraday high of $1.05. Sadly, it soon tumbled to its intraday low of 95 cents – a 4% slump.

At the time of writing, the Zip share price has partially recovered to trade at 96 cents, 2.83% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.26% despite having gained as much as 1.1% earlier in the day.

Let’s take a closer look at what’s going on with the BNPL stock and the broader market on Monday.

What’s going on with the Zip share price?

The Zip share price rocked then rolled on Monday amid a broader market spin.

The ASX 200 launched upwards today before disappointing data from China stunted its rise.

COVID-19 lockdowns hit the nation in the pocket over April, as reflected in China’s National Bureau of Statistics data.

China’s unemployment rate rose to 6.1% while the cost of necessities rose rapidly last month. The nation’s total retail sales also fell 11.1%.

Turning to the tech sector, the S&P/ASX 200 Information Technology Index (ASX: XIJ) is currently recording a 1.7% gain. Though, earlier this morning it was trading up to 4.25% higher.

While Zip isn’t technically a tech share, it can arguably be classed as one and generally performs in line with the tech sector.

Today’s best performing ASX 200 tech shares are Life360 Inc (ASX: 360), Block Inc (ASX: SQ2), and Xero Limited (ASX: XRO). They are currently up 4.84%, 3.73%, and 3.52% respectively.

Meanwhile, the sector’s worst performers are Tyro Payments Ltd (ASX: TYR), Codan Limited (ASX: CDA), and WiseTech Global Ltd (ASX: WTC), having slipped 4%, 2.47%, and 1% respectively.  

The Zip share price has tumbled 78% so far this year. It is also 86% lower than it was this time last year.

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 Block, Inc., Life360, Inc., Tyro Payments, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, and Xero. The Motley Fool Australia has recommended Tyro Payments. 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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