The Zip Co Ltd (ASX: ZIP) share price is back on the horse on Wednesday. Its recovery comes as the S&P/ASX 200 Information Technology Index (ASX: XIJ) leads the market, gaining 3.57%.
At the time of writing, the Zip share price is 60.5 cents, 18.63% higher than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.25%.
Let's take a look at what might be going on with the ASX 200 buy now, pay later (BNPL) share and its tech peers today.
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What's driving the Zip share price higher today?
ASX 200 tech stocks are launching higher on Wednesday and the Zip share price is leading the way.
That's despite the Reserve Bank of Australia hiking interest rates 50 basis points to 1.35% yesterday. The move is likely bad news for consumer sentiment and could have been expected to weigh on the BNPL giant's stock today.
While Zip isn't technically a tech share – it's at home on the S&P/ASX 200 Financials Index (ASX: XFJ) – the company's stock tends to trade in line with its technology-focused peers.
The tech sector's rally might be a reaction to a strong session on the tech-heavy NASDAQ index on US markets overnight.
The Nasdaq Composite lifted 1.75% in Tuesday's session overseas following a public holiday on Monday.
Its surge also comes as bond yields fall. US 10-year yields fell by around 2.8% overnight.
LPL Financial's Quincy Krosby has reportedly linked falling bond yields with potential gains among tech stocks. Krosby was quoted by News.com.au as saying:
The concern of a recession is deepening … You look for growth, where you can find it. Many of those large tech names that have been beaten up by the market become attractive again, particularly when the bond yields are lower.
Today's gain leaves the Zip share price 86% lower than it was at the start of 2022. The ASX 200 tech sector has also slumped 34% year-to-date.
