Here's why ASX 200 tech shares are surging today

Finally a green day for beaten up tech shares …

| More on:
happy teenager using iPhone

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

S&P/ASX 200 Index (ASX: XJO) tech shares scored a turnaround on Thursday after a very difficult past two weeks.

The S&P/ASX All Technology Index (ASX: XTX) is up 72 points or 2.43%, bouncing off 2-month lows on Tuesday.

The gains are headlined by tech heavyweights Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC), all of which are up around about 3%.

ASX 200 tech shares in the mid cap space have also found a footing. Electronics software provider Altium Limited (ASX: ALU) is up 3.03% to $33.98. Data centre and network connections company Megaport Ltd (ASX: MP1) is rallying 4.04% to $16.47. IT hardware and software distributor Dicker Data Ltd (ASX: DDR) is pushing 3.20% higher to $12.27.

ASX 200 tech shares find a footing

The seasonally volatile months of September and October have lived up to expectations, giving investors motion sickness as the index seems to climb or fall by more than 1% every day.

Investors have become fixated on bond yields, with the US 10-year Treasury yield surging to 3-month highs of 1.575% on Wednesday.

Yields have ticked higher on concerns about higher energy prices and inflation, which could trigger tighter monetary policy in the near term.

On Wednesday, New Zealand's central bank raised its interest rates for the first time in seven years, signalling further hikes to come as it looks to get on top of inflationary pressures.

The era of ultra-low interest rates could very well come to an end soon.

Tech stocks have copped the brunt of the selling as rising yields can make a fast-growing company's future cash flows appear less valuable.

As a result, ASX 200 tech shares have been subject to whipsaw like action as investors rotate to more value or cyclical sectors.

At the same time, on days like today, bargain-hunters have stepped up to 'buy the dip'.

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Altium, Dicker Data Limited, MEGAPORT FPO, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, Dicker Data Limited, WiseTech Global, and Xero. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

group of traders cheering at stock market
Technology Shares

Codan shares near an all time high. Can they go higher?

Is there more room for growth for this ASX 200 company? 

Read more »

Kid putting a coin in a piggy bank.
Technology Shares

Why I think this ASX small-cap stock is a bargain at $4.41

This tech business has a lot going for it.

Read more »

The last piece of the jigsaw being fitted, indicating good news for a share price on merger or acquisition
Mergers & Acquisitions

WiseTech share price storms higher on $3.25b blockbuster acquisition

What is the company spending billions on? Let's find out.

Read more »

A businessman stacks building blocks.
Technology Shares

6% gain! What's up with Block shares today?

Block shares are up more than 34% since 2 May.

Read more »

Happy work colleagues give each other a fist pump.
Technology Shares

Guess which ASX 200 technology stock has outperformed Nvidia over the past 5 years?

This company has been nothing short of impressive.

Read more »

Buy, hold, and sell ratings written on signs on a wooden pole.
Technology Shares

After surging 13% yesterday, are TechnologyOne shares a buy, hold or sell according to Macquarie?

Valuations matter when investing, and Macquarie feels no different.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Technology Shares

Why Goldman Sachs rates this ASX tech share as a top buy

Let's see why the broker rates this stock highly right now.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Technology Shares

WiseTech shares have surged 34% since April. Is it too late to buy?

Can WiseTech shares keep charging higher? Here’s what this investing expert expects.

Read more »