What on earth happened to ASX 200 tech shares in June?

Why did ASX 200 tech shares have such a horrible month over June?

| More on:
Technology written in orange in tech sector financial diagram.

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 shares had a rough month over June 
  • But ASX tech shares fared even worse overall 
  • What was behind the carnage in the tech sector last month? 

It wasn’t a great month for ASX 200 shares or the S&P/ASX 200 Index (ASX: XJO) last month. June saw the ASX 200 lose a painful 8.9% of its value. But it was a lot bleaker for ASX 200 tech shares.

As is often the case, June saw ASX tech shares pull back by far more than the broader market. Although the ASX 200 lost 8.9% over June, the S&P/ASX All Technology Index (ASX: XTX) went backwards by 10.3%.

But many ASX tech shares had an even worse time of it than the All Tech index. Take Xero Limited (ASX: XRO). Shares of this online accounting software provider fell by 13.8% over the month just gone. Or Block Inc (ASX: SQ2). Block shares shed a nasty 28.17% over June alone. Zip Co Ltd (ASX: ZIP) takes the cake with its disastrous loss of 52.17% over the month.

Other prominent ASX tech shares include WiseTech Global Ltd (ASX: WTC), losing 10.1%, Seek Limited (ASX: SEK) down 13.4%, and Appen Ltd (ASX: APX) with its 13% loss.

But it wasn’t a total wash for ASX tech shares. Some recorded gains for June. These included Pro Medicus Limited (ASX: PME), which rose 0.28%.

But overall, it was a pretty nasty month for ASX tech shares.

What happened to ASX 200 tech shares last month?

But why? Well, there wasn’t a lot of news out of the sector itself over June. But we did see similar moves over on the US markets. June also saw many US tech shares record similar losses. Take Tesla Inc (NASDAQ: TSLA). It lost more than 11% last month.

So we can probably blame ASX tech shares’ poor June on the concerns over inflation and rising interest rates that have dominated investors’ fears for months now. Last month saw both the US Federal Reserve and our own Reserve Bank of Australia (RBA) decisively hike interest rates. Most commentators expect many more rate hikes over the rest of the year, and into 2023.

Tech shares, with their (in many cases) future-derived valuations and lack of present profitability, are often perceived to be riskier assets in this kind of environment. Thus, it’s perhaps no surprise that these kinds of companies have copped the worse of the market’s falls over June. No doubt investors will be hoping for a brighter July. But we’ll have to wait and see what this month brings for the ASX 200 tech shares sector.

Motley Fool contributor Sebastian Bowen has positions in Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd, Block, Inc., Pro Medicus Ltd., Tesla, WiseTech Global, Xero, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc., Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has recommended SEEK Limited. 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 people gather around a large computer screen where they are looking at something that is captivating their interest with a graphic image of data and digital technology material superimposed to the right hand third of the image.
Technology Shares

Is the Megaport share price a buy following the company’s latest results?

Could Megaport go higher?

Read more »

Three colleagues stare at a computer screen with serious looks on their faces.
Dividend Investing

‘Exciting’ ASX 200 dividend share expected to deliver material returns: expert

Investors seeking income stocks need to do more than simply look at what the companies paid out over the past…

Read more »

Two men laughing while bouncing on bouncy balls
Share Gainers

Why is the BrainChip share price bouncing 6% higher today?

What's causing the BrainChip share price to pop on Tuesday?

Read more »

Man pointing at a blue rising share price graph.
Earnings Results

Megaport share price rises as revenue lifts 40%

Investors appeared to react positively to Megaport's results.

Read more »

a man sits at his desk wearing a business shirt and tie and has a hearty laugh at something on his mobile phone.
Technology Shares

Here are 2 excellent ASX tech shares a top broker says are buys

Here are two highly rated ASX tech shares...

Read more »

A cloud with a blue arrow pointing upwards through its middle symbolising a rising asx share price
Share Gainers

Guess which ASX tech share just soared 40% on takeover news

This small-cap ASX tech share has shot up 40% today.

Read more »

A man leaps through the air with a swimming cap and a look of uncertainty.
Share Gainers

Why is the Appen share price jumping 10% on Monday?

What's going on with Appen shares?

Read more »

A frustrated male investor frowns with his hands and arms open asking why the share price has dropped today
Technology Shares

Why is the Novonix share price having such a lousy start to the week?

The Novonix share price is handing back some of its recent gains.

Read more »