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Tech-tonic shift? ASX tech shares rally following Nasdaq’s lead

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After a sustained period of selling, ASX tech shares are beginning to give their tested shareholders some hope.

This follows a flood of green across technology stocks on Wall Street last night, leading to the biggest percentage gain in a single session for the S&P 500 since June 2020.

At present, information technology is the best performing sector on the ASX today. With not a single ASX tech share constituent in the red, the sector is up by more than 4%. Meanwhile, the broader S&P/ASX 200 Index (ASX: XJO) is up a lesser 1.09%.

Are buyers beginning to sweep in?

There’s no doubt about it, the past few months have been a difficult time for tech investors. The once-booming sector began to fall away as inflation fears entered the fray late last year. Since then, the situation has only worsened.

In turn, it is estimated that around 70% of US tech shares have fallen by more than 20% — entering a bear market. Even bleaker, approximately a third have sunk more than 50% from their recent highs. The rapid south trajectory has shown a lack of willing buyers.

Simultaneously, an energy shortage — that has only been amplified by the circumstances surrounding Russia — has led to a rejuvenation in sentiment towards oil and gas companies. As such, the performance of ASX tech shares and US tech shares has been the polar opposite of the energy sector, as shown in the chart below.

Comparison of the S&P/ASX All Technology Index (ASX: XTX) and the S&P/ASX 200 Energy Index (ASX: XEJ).

However, with oil prices retreating by 12.8% overnight to US$107.64, the market is deliberating over whether the impacts are starting to be overblown.

Simply put, all of the tech names inside the ASX 200 are riding the wave higher today. Though, here are the five best performing shares in the sector on Thursday:

Notably, US-based digital payments giant Block Inc CDI (ASX: SQ2) is trading 7.8% higher after gaining 11.3% overnight.

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