It certainly has been a disappointing start to the week for Australia's leading tech shares.
At the time of writing the S&P/ASX 200 Info Tech index is down a sizeable 3% to 1,277.1 points.
Here's the current state of play for key components of the index:
- The Altium Limited (ASX: ALU) share price has dropped 6% to $32.88.
- The Appen Ltd (ASX: APX) share price is down 4.5% to $22.42.
- The Afterpay Touch Group Ltd (ASX: APT) share price has fallen 4% to $19.82.
- The Bravura Solutions Ltd (ASX: BVS) share price is down 3.5% to $5.39.
- The Technology One Limited (ASX: TNE) share price has dropped 1.5% to $7.90.
- The WiseTech Global Ltd (ASX: WTC) share price has tumbled almost 4% to $22.45.
- The Xero Limited (ASX: XRO) share price is off 2.5% to $48.56.
Why are tech shares sinking lower today?
Investors have been hitting the sell button in a panic today after their U.S. counterparts dropped notably lower on Friday night.
All of the FAANG stocks tumbled lower, dragging the Nasdaq index down by 2.5%. Amazon and Netflix were the worst performers with 3% and 4.5% declines, respectively.
The catalyst for the selling appears to have been weak manufacturing data out of Germany on Friday.
According to CNBC, manufacturing activity in Germany dropped to its lowest level in more than six years and in France manufacturing and services slowed down to their lowest levels in three months and two months, respectively.
This, combined with the U.S. Federal Reserve's dovish comments on Wednesday, has sparked fears over global economic growth and heightened recession concerns.
Liz Ann Sonders, chief investment strategist at Charles Schwab, told CNBC that: "The indicators are stacking up to suggest that this is not a 2021 phenomenon, that we could actually see the possibility of a recession starting maybe later this year."
Whilst I think this is arguably a buying opportunity for a lot of these tech shares, it may be best to wait for the dust to settle on this latest before making a move.
