S&P/ASX 200 Index (ASX: XJO) tech shares scored a turnaround on Thursday after a very difficult past two weeks.
The S&P/ASX All Technology Index (ASX: XTX) is up 72 points or 2.43%, bouncing off 2-month lows on Tuesday.
The gains are headlined by tech heavyweights Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC), all of which are up around about 3%.
ASX 200 tech shares in the mid cap space have also found a footing. Electronics software provider Altium Limited (ASX: ALU) is up 3.03% to $33.98. Data centre and network connections company Megaport Ltd (ASX: MP1) is rallying 4.04% to $16.47. IT hardware and software distributor Dicker Data Ltd (ASX: DDR) is pushing 3.20% higher to $12.27.
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ASX 200 tech shares find a footing
The seasonally volatile months of September and October have lived up to expectations, giving investors motion sickness as the index seems to climb or fall by more than 1% every day.
Investors have become fixated on bond yields, with the US 10-year Treasury yield surging to 3-month highs of 1.575% on Wednesday.
Yields have ticked higher on concerns about higher energy prices and inflation, which could trigger tighter monetary policy in the near term.
On Wednesday, New Zealand's central bank raised its interest rates for the first time in seven years, signalling further hikes to come as it looks to get on top of inflationary pressures.
The era of ultra-low interest rates could very well come to an end soon.
Tech stocks have copped the brunt of the selling as rising yields can make a fast-growing company's future cash flows appear less valuable.
As a result, ASX 200 tech shares have been subject to whipsaw like action as investors rotate to more value or cyclical sectors.
At the same time, on days like today, bargain-hunters have stepped up to 'buy the dip'.
