The Zip Co Ltd (ASX: ZIP) share price has started the week in the red.
In afternoon trade, the buy now pay later (BNPL) providerâs shares are down 1.5% to 65 cents.
Why is the Zip share price falling?
The Zip share price is under pressure today despite there being no news out of the BNPL provider.
However, it is worth noting that both the financials and tech sectors are under pressure today, which could be weighing on its shares.
For example, the S&P/ASX 200 Financials index is down 1.2% this afternoon and the S&P/ASX All technology Index is down 0.9%.
Anything else?
Itâs possible that some commentary from Westpac Banking Corp (ASX: WBC) CEO Peter King could be putting pressure on the Zip share price.
King spoke cautiously about the economic environment and consumer spending. He said:
We are not yet seeing increases in hardship or stressed assets. Many customers built up savings during the past two years and 68% remain ahead on their mortgage repayments. However, it is inevitable that the impact of higher rates will be felt, including when borrowersâ low fixed-rate loans are rolled over.
In Australia, consumer spending is resilient but as higher rates bite, we expect the heat to come out of the economy and inflation pressures to ease. Small business is one sector we are watching closely as consumption slows. Housing prices have fallen in recent months and this will continue into 2023. Credit growth is expected to ease. GDP growth will slow and unemployment will rise. These will be necessary outcomes if we are to lower inflation.
Whether this impacts spending on Zipâs platform, only time will tell.
The post Why is the Zip share price dropping today? appeared first on The Motley Fool Australia.
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More reading
- Zip share price slides despite CEO pinpointing profit timeline
- What could this proposed regulation mean for Zip shares?
- Why is the Zip share price up 5% on Tuesday?
- Why has the Zip share price dumped 12% in October?
- Could this represent another nail in the Zip share price coffin?
Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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