While the ASX 200 is down 1.1% in late afternoon trading, technology stocks are broadly faring worse.
A look at the S&P/ASX All Technology Index (ASX: XTX), which contains some smaller companies outside of ASX 200 tech shares, reveals the index is down 3.7%.
Top ASX 200 tech shares sliding today
Today’s selling action sees cloud accounting services provider Xero Limited (ASX: XRO) down 5.6% to $77.98 per share.
Global online real estate advertising company REA Group Limited (ASX: REA) is trailing the benchmark too. REA shares are down 2.8% to $111.83.
And payment services provide Block Inc (ASX: SQ2) is following a similar path on the ASX today as its NYSE entity did yesterday (overnight Aussie time). The buy now, pay later (BNPL) giant, which acquired Afterpay back in January, closed down 5.5% in the US markets. It’s currently down 6.5% on the ASX, trading for $94.05 per share.
Carsales.com Ltd (ASX: CAR) is putting in the worst performance among the ASX 200 tech shares today. Shares in the online vehicle and boat classified company are down 12.3% to $18.20 per share.
Carsales looks to be under specific selling pressure following this morning’s announcement that it had successfully raised some $842 million for $17.75 per share. That’s a sharp discount from yesterday’s closing price of $20.76 per share.
Why is the tech sector under pressure?
ASX 200 tech shares are under selling pressure today following some heavy selling in US markets. As investors unloaded US tech stocks, the Nasdaq closed the day down 3%.
Investors remain jittery about the potential of a US recession, as inflation continues to run hot and global central banks join the Federal Reserve in hiking interest rates.
Last month the Fed hiked the official US benchmark rate by an outsized 0.75%. And investors are bracing for the potential of a similar rate increase from the influential central bank in July.
What next for ASX 200 tech shares?
Investor jitters have ramped up volatility in the global stock markets, with tech shares seeing some of the biggest price swings. And analysts are predicting there’ll be more big price moves ahead.
According to Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management (quoted by Bloomberg):
The one thing that we can say with conviction is that high market volatility is likely to persist until there’s clear evidence that inflation is declining and the Fed pivots towards a less hawkish stance, taking the off-ramp away from the recession destination.