The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) looks set to give back all of yesterday's gains with another significant drop lower on Wednesday.
At the time of writing ASX futures are pointing to a 60-point drop at the open, equating to a decline of just over 1%.
What happened?
Overnight the NASDAQ 100 (ASX: NDQ) fell almost 3% after tech shares were sold off in a frenzied bout of panic selling. The move was so sudden that at one stage the index fell as much as 1% in the space of 20 minutes.
The shares of popular tech companies such as the FAANGs (Facebook, Amazon, Apple, Netflix, and Alphabet's Google) all fell sharply in the latter part of trade.
The catalyst for this sell-off appears to be reports that the Trump administration is considering a crackdown on Chinese investments in technologies that the U.S. considers sensitive.
In addition to this, the Cambridge Analytica-Facebook scandal continues to weigh on sentiment and has investors concerned that other tech companies could be failing users on data privacy.
This led to a well-known short seller declaring Twitter as its next target, sending its shares down as much as 12% overnight.
What now?
Although the main catalyst for this decline should have no bearing on Australian share markets, ASX futures beg to disagree and it looks likely that Australian tech shares will be heavily sold off today.
This could lead to the likes of Appen Ltd (ASX: APX), Altium Limited (ASX: ALU), and WiseTech Global Ltd (ASX: WTC) falling deep into red on Wednesday.
Whilst it might be best to let the dust settle before picking up shares, I do think that any sell off of Australian tech shares today would be unwarranted and potentially a buying opportunity.
I'll certainly be on the look out for any bargain buys, that's for sure.
