What’s happening with ASX 200 tech shares today?

Growth shares are more sensitive to interest rate hikes as they’re often priced with distant future earnings in mind.

| More on:
two computer geeks sit across from each other with their laptop computers touching as they look confused and confounded by what they are seeing on their screens.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • ASX 200 tech shares are following the NASDAQ lower
  • Only one ASX 200 tech share is in the green today
  • Investors are concerned about the potential for large interest rate increases

It’s another white-knuckle day for investors in S&P/ASX 200 Index (ASX: XJO) tech shares.

A good reminder, perhaps, not to get too caught up in the daily price swings and keep your eye on your long-term investment goals.

But with our own eyes glued to the trading screens at the moment, we can’t help but note the big retreat among ASX 200 tech shares.

Today’s sell-off is hitting almost every corner of the market, with the ASX 200 down 1.6% at the time of writing.

Tech shares are faring worse, with the S&P/ASX All Technology Index (ASX: XTX) down 2.43%.

Only one ASX 200 tech share is in the green

The sole ASX 200 tech share that’s shrugging off the selling action is Pro Medicus Limited (ASX: PME).

Shares in the healthcare imaging software and services provider are up 1.84% to $40.97.

The other big-name stocks aren’t faring quite as well.

The Xero Limited (ASX: XRO) share price, for example, is down 3.28%, while shares in WiseTech Global Ltd (ASX: WTC) are down 2.23%.

Meanwhile, global payments giant Block Inc (ASX: SQ2) has seen its shares fall 3.19%, following a 3.3% drop in its US-listed shares yesterday (overnight Aussie time).

Why the big tech sell-off?

ASX 200 shares are under selling pressure today following the biggest single-day losses in US markets posted in almost two years.

The S&P 500 Index (SP: .INX) finished the trading day down 4% while the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) lost 4.7%. European markets broadly retreated as well, with the German Dax Performance Index dropping 1.3%.

The selling in international markets and among ASX 200 tech shares comes as investors remain concerned and uncertain about fast-rising prices across most Western nations, and the resulting interest rate rises needed to keep that inflation in check.

Slowing retail sales figures out of the US are also pointing to the increasing possibility the world’s biggest economy could be heading for a recession.

Commenting on the latest market falls, Carl Ludwigson, managing director of Bel Air Investment Advisors, said (quoted by Bloomberg):

The threat to asset prices is broad-based inflation pushing central banks to tighten monetary policy even more rapidly. If the Federal Reserve’s policy response proves too aggressive, then Treasuries and high-quality municipal bonds will again be the place to hide as tighter financial conditions lead to demand destruction.

With ASX 200 tech shares often priced with future earnings in mind, they’re particularly sensitive to investor fears over aggressive interest rate rises.

Of course, five or 10 years from now, this will all likely just be a bump in the road.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc., Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

Three businesspeople leap high with the CBD in the background.
Technology Shares

Why is the PointsBet share price storming 13% higher today?

PointsBet's shares are jumping again on Thursday...

Read more »

a group of three young men sit on a sofa in a home environment with a bowl of popcorn and beer bottls in front of them cheering on one of their group as he looks excitedly at his phone as though he's just had some success on an online gambling app.
Technology Shares

Why is the BetMakers share price charging 7% higher today?

BetMakers shares are having a decent start to the day...

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Technology Shares

Here’s why the Electro Optic Systems share price collapsed 26% today

The defence contractor's shares did not win the battle today.

Read more »

A man yells as his virtual reality headset and earphones tumble to the floor.
Technology Shares

Here’s why ASX 200 tech shares are taking a beating on Wednesday

Global share markets are forecast to remain volatile until inflation is brought under control.

Read more »

A man yells as his virtual reality headset and earphones tumble to the floor.
Technology Shares

Why is the Altium share price down 5% today?

Altium shares are erasing most of their gains achieved this week.

Read more »

Technology Shares

Megaport share price slumps 5% despite takeover speculation

A takeover could be in the works with Megaport. So, why are shares down?

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Technology Shares

Why is the Weebit Nano share price charging 5% higher today?

Weebit Nano is progressing the development of its ReRAM technology.

Read more »

Two people work with a digital map of the world, planning their logistics on a global scale.
Technology Shares

Own Nearmap shares? Here’s how much cash the company has up its sleeves

This ASX tech share boasts a "very strong balance sheet".

Read more »