Why are ASX 200 tech shares having such a cracking start to the week?

Tech shares are outperforming the S&P/ASX 200 Index (ASX: XJO) on Monday.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) has lifted 1.6% compared to the broader index’s 0.99% rise at the time of writing.

That makes it the market’s second-best performing sector, behind only the S&P/ASX 200 Materials Index (ASX: XMJ).

Further, the S&P/ASX All Technology Index (ASX: XTX) has lifted 1.21% right now.

So, what’s driving tech shares higher on Monday and which ASX 200 constituents are leading the sector? Let’s take a look.

Why are ASX 200 tech shares outperforming today?

ASX 200 tech shares have started the week out on the right foot following a strong session on Wall Street.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) lifted 2.11% to post its third consecutive gain on Friday after dumping 8.6% between 25 August and 6 September. The index ultimately gained 4.14% over the course of last week.

And ASX 200 tech stocks are following its lead. The tech sector gained 3.8% last week, while today’s rise has boosted it to a three-week high.

It appears that one of the most embattled stocks is posting the biggest gains today. The best performing ASX 200 tech share right now is EML Payments Ltd (ASX: EML), having gained 6.5% to trade at $1.065 at the time of writing.

It plummeted 11% on 24 August after the company revealed it identified fraudulent activity within its debt processing business.

The Block Inc (ASX: SQ2) share price is also posting a notable gain today, rising 4.9% to $109 right now.

Meanwhile, in third place is the Life360 Inc (ASX: 360) share price. It’s currently up 5.5% at $5.73.

Its fellow market favourites Megaport Ltd (ASX: MP1) and NextDC Ltd (ASX: NXT) are also pushing higher, gaining 3.1% and 2.8% respectively.

However, the ASX 200 tech sector has a long way to go to catch up with the broader market. It has dumped 28% year to date, while the All Tech Index has slumped 27%.

For context, the ASX 200 has lost 8% since the start of this year.

The post Why are ASX 200 tech shares having such a cracking start to the week? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Monday
• Analysts name 3 ASX growth shares to buy next week
• Here are the top 10 ASX 200 shares today
• Why A2 Milk, Life360, Nine, and Ramsay shares are dropping

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc., EML Payments, Life360, Inc., and MEGAPORT FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. and EML Payments. 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 Scott Phillips.

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