What on earth happened to ASX 200 tech shares in June?

It wasn’t a great month for ASX 200 shares or the S&P/ASX 200 Index (ASX: XJO) last month. June saw the ASX 200 lose a painful 8.9% of its value. But it was a lot bleaker for ASX 200 tech shares.

As is often the case, June saw ASX tech shares pull back by far more than the broader market. Although the ASX 200 lost 8.9% over June, the S&P/ASX All Technology Index (ASX: XTX) went backwards by 10.3%.

But many ASX tech shares had an even worse time of it than the All Tech index. Take Xero Limited (ASX: XRO). Shares of this online accounting software provider fell by 13.8% over the month just gone. Or Block Inc (ASX: SQ2). Block shares shed a nasty 28.17% over June alone. Zip Co Ltd (ASX: ZIP) takes the cake with its disastrous loss of 52.17% over the month.

Other prominent ASX tech shares include WiseTech Global Ltd (ASX: WTC), losing 10.1%, Seek Limited (ASX: SEK) down 13.4%, and Appen Ltd (ASX: APX) with its 13% loss.

But it wasn’t a total wash for ASX tech shares. Some recorded gains for June. These included Pro Medicus Limited (ASX: PME), which rose 0.28%.

But overall, it was a pretty nasty month for ASX tech shares.

What happened to ASX 200 tech shares last month?

But why? Well, there wasn’t a lot of news out of the sector itself over June. But we did see similar moves over on the US markets. June also saw many US tech shares record similar losses. Take Tesla Inc (NASDAQ: TSLA). It lost more than 11% last month.

So we can probably blame ASX tech shares’ poor June on the concerns over inflation and rising interest rates that have dominated investors’ fears for months now. Last month saw both the US Federal Reserve and our own Reserve Bank of Australia (RBA) decisively hike interest rates. Most commentators expect many more rate hikes over the rest of the year, and into 2023.

Tech shares, with their (in many cases) future-derived valuations and lack of present profitability, are often perceived to be riskier assets in this kind of environment. Thus, it’s perhaps no surprise that these kinds of companies have copped the worse of the market’s falls over June. No doubt investors will be hoping for a brighter July. But we’ll have to wait and see what this month brings for the ASX 200 tech shares sector.

The post What on earth happened to ASX 200 tech shares in June? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd, Block, Inc., Pro Medicus Ltd., Tesla, WiseTech Global, Xero, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc., Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has recommended SEEK Limited. 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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