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Why are ASX tech shares having such a stellar day?

ASX tech shares are rocketing higher today. And it seems to be thanks to Elon Musk…

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Sebastian Bowen
Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record.
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Key points
  • The ASX 200 is powering ahead today
  • The leading sector in these gains is ASX tech shares
  • But what does Elon Musk have to do with these gains?

The S&P/ASX 200 Index (ASX: XJO) is having another great start to this day's trading thus far. At the time of writing, the ASX 200 is up a healthy 0.41% at just under 7,550 points. Although many ASX shares are in the green today, it seems ASX tech shares are leading the charge.

For one, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has recorded the highest gain of any ASX sector so far today. It's currently up a pleasing 3.22%. But we are also seeing this flow into the share prices of many ASX tech shares. Take Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX). These ASX tech stalwarts are up 4.17% and 2.6% respectively so far today. Xero Limited (ASX: XRO) is up 4.35%. And leading the tech sector's gains is Block Inc (ASX: SQ2), up a whopping 6.42% so far today to $191.80 a share.

So why are ASX tech shares powering ahead so enthusiastically?

A group of people gathered around a laptop computer with various expressions of interest, concern and surprise on their faces. All are wearing glasses.

Image source: Getty Images

ASX tech shares rising? Thank Elon Musk…

Well, we can't be certain. But these ASX tech share moves likely have at least something to do with the blockbuster announcement last night (our time) that Tesla Inc (NASDAQ: TSLA) CEO Elon Musk made.

Musk, the world's richest person, has long been known for his, er, market antics. Musk dropped a bombshell announcement last night, revealing he has just purchased a US$3.68 billion stake in the social media company Twitter Inc (NYSE: TWTR). As my Fool colleague Mitchell covered this morning, Musk now owns a 9.2% stake in Twitter, making him the company's single largest shareholder. He now owns more than four times as many Twitter shares as the company's founder, Jack Dorsey. Dorsey is also a founder of Block, as it turns out.

So this move saw the Twitter stock price jump a massive 27% by the close of the US markets. Tesla stock was up more than 5% as well, with many other US tech shares also finishing higher.

It's likely these events and market moves are at least partially responsible for the subsequent enthusiasm we see with ASX tech shares today. Especially with the ASX-listed Block shares. Never a dull moment with Elon Musk.

Motley Fool contributor Sebastian Bowen owns Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Altium, Appen Ltd, Block, Inc., Tesla, Twitter, and Xero. The Motley Fool Australia owns and has recommended Block, Inc. and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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