Why are ASX tech shares having such a cracking run on Thursday?

ASX 200 tech shares are in the green today after the Nasdaq rallied in the United States overnight.

The S&P/ASX All Technology Index (ASX: XTX) is lifting 1.28% today, while the  S&P/ASX 200 Info Tech (ASX: XIJ) is lifting 0.83%.

Let’s take a look at what is impacting ASX tech shares today.

Tech shares rise

Tech shares in the green today include:

• Megaport Ltd (ASX: MP1), soaring 5.46%
• Appen Ltd (ASX: APX), surging 11.24%
• Block Inc (ASX: SQ2), charging 7.14% higher
• TechnologyOne Ltd (ASX: TNE), rising 1.14%
• Altium Limited (ASX: ALU), leaping 1.76%

However, the BrainChip Holdings Ltd (ASX: BRN) and NextDC Ltd (ASX: NXT) share prices are bucking the trend, down 0.41% and 4.51%, respectively.

ASX tech shares are rising after the NASDAQ-100 Technology Sector Index (NASDAQ: NDXT) surged 5.24% in the USA overnight. Apple Inc (NASDAQ: AAPL) shares lifted 4.86%, while Meta Platforms Inc (NASDAQ: META) shares soared nearly 8%.

Tech shares lifted after investors appeared to react to a speech from US Federal Reserve Chair Jerome Powell.

Speaking at the Brookings Institution in Washington D.C, Powell said it makes sense to “moderate” the pace of interest rate rises. He said:

Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt. Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.

The time for moderating the pace of rate increases may come as soon as the December meeting. 

Megaport is an example of an ASX tech share with a noteable presence in the United States. For example, $6.5 million of Megaport’s revenue in the first quarter of FY23 came from North America.

In addition, some investors may look at what’s happening in the United States for signs on the direction of Australia’s central bank.

The Reserve Bank of Australia is due to meet next Tuesday for a monetary policy decision. Australia’s annual inflation rose 6.9% in the 12 months to October 2022, the ABS announced yesterday. However, this was down from the 7.3% annual change reported in September.

However, InvestSmart chief market strategist Evan Lucas predicted the RBA will lift rates in an interview with Sky News. Commenting on inflation and potential rate rises, he said:

6.9% is still a long, long way from where it needs to be.

The RBA next week will raise rates.

The post Why are ASX tech shares having such a cracking run on Thursday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Block share price skyrocketing today?
• 5 things to watch on the ASX 200 on Thursday
• Analysts name the ASX tech shares to buy right now
• Is the Appen share price on the way back up?
• Best of a bad bunch: The 3 best-performing ASX 200 tech shares in November

Motley Fool contributor Monica O’Shea 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 Altium, Appen, and Megaport. The Motley Fool Australia has recommended Megaport and Technology One. 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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