Zip Co Ltd (ASX: Z1P) shares might have shocked investors this morning after falling by as much as ~7% to a one-month low of $7.79. The Zip share price has since staged a significant intraday recovery to be down just 1.78% at the time of writing.
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ASX 200 tech shares under pressure
The S&P/ASX Information Technology (ASX: XIJ) index continues to face relentless selling pressure and is currently down nearly 2% today.
The index's five-day performance sits at -3.20% while its one-month performance is a shocking -18.2%. This compares to the S&P/ASX 200 Index (ASX: XJO) which is down just 2.2% in the last month.
The tech index has been dragged down by heavyweights Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) which all experienced a similar topping out pattern in mid-Feb. The three heavyweights have lost at least 20% in value since mid-Feb.
No big issues overnight
The Nasdaq Composite (NASDAQ: .IXIC) finished 0.04% lower overnight while the Dow Jones Industrial Average (DJX: .DJI) surged 1.46% higher into record all-time highs. US benchmark bond yields also eased to 1.52% after closing at a one-year high of 1.60% on Tuesday.
Perhaps more importantly for the Zip share price, US buy now, pay later giant (BNPL), Affirm Holdings Inc (NASDAQ: AFRM) closed 1.38% higher.
Why is the Zip share price so weak?
On Thursday, there has been weakness across the board for ASX tech shares and more specifically, BNPL shares. The Afterpay share price is 4.36% lower to $110.24 at the time of writing, bringing its year-to-date returns to around -7%.
Elsewhere today, the Sezzle Inc (ASX: SZL) share price is down 3.37%, the Laybuy Holdings Ltd (ASX: LBY) share price is down 2.94%, Openpay Group Ltd (ASX: OPY) shares have fallen by 0.4% and the Splitit Ltd (ASX: SPT) share price has tumbled 1.97%. The only BNPL stock that is green today is the beaten up Humm Group Ltd (ASX: HUM).
The Zip share price was downgraded by analysts at UBS yesterday from a neutral to sell rating. The broker was concerned about potential execution risks and additional capital requirements to grow the business. As a result, UBS slapped a $6.40 share price target on Zip.
There could also be lingering fears after PayPal announced its plans to launch its BNPL product in Australia yesterday.
