Tech shares led the ASX 200 market sectors this week, gaining 2.01% over the past five trading days.
All 11 market sectors finished the week higher.
The S&P/ASX 200 Index (ASX: XJO) rose 1.12% over the five days to close at 7,590.8 points on Friday — the last trading day of 2023.
The ASX 200 rose by a respectable 7.84% over the year, booking a strong finish due to the early Santa Rally, which commenced in early November on the back of hopes of interest rate cuts in 2024.
Let's review the week.
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Tech shares led the ASX sectors this week
The Santa Rally of 2023 was propelled by optimism that global interest rates will fall in the new year as inflation eases in the advanced economies. Rising commodity prices — particularly iron ore — also helped.
The prospect of lower interest rates is a particular tailwind for ASX 200 tech shares.
By nature, tech companies are typically in growth mode and thus are often carrying more debt than others to fund that growth. So, high interest rates really add to their costs. Plus, many ASX tech shares are not yet profitable, making them less appealing when investors are feeling bearish about the economy.
It looks like tech shares continued to benefit from expectations of rate cuts this week. This follows the United States Fed Reserve keeping rates on hold for the third consecutive month in December.
Among the larger ASX 200 tech shares, Wisetech Global Ltd (ASX: WTC) shares rose by 2.52% to $75.37 this week.
The Nextdc Ltd (ASX: NXT) share price lifted 1.93% to $13.73.
Xero Limited (ASX: XRO) shares rose by 1.45% to $112.30 apiece.
ASX 200 market sector snapshot
Here's how the 11 market sectors stacked up this week, according to CommSec data.
Over the past five days:
| S&P/ASX 200 market sector | Change this week |
| Information Technology (ASX: XIJ) | 2.09% |
| Materials (ASX: XMJ) | 1.6% |
| Consumer Discretionary (ASX: XDJ) | 1.55% |
| Healthcare (ASX: XHJ) | 1.52% |
| Consumer Staples (ASX: XSJ) | 1.35% |
| A-REIT (ASX: XPJ) | 1.34% |
| Communication (ASX: XTJ) | 1% |
| Financials (ASX: XFJ) | 0.96% |
| Industrials (ASX: XNJ) | 0.51% |
| Utilities (ASX: XUJ) | 0.04% |
| Energy (ASX: XEJ) | 0.02% |
