The Block Inc (ASX: SQ2) share price is down 1.8% today amid the wider market sell-off.
Block shares closed yesterday at $97.75 and are currently trading for $95.98 apiece.
The dual-listed ASX buy now, pay later (BNPL) share, which acquired Afterpay in January this year, closed down 1.6% on the New York Stock Exchange yesterday (overnight Aussie time).
With the intraday fall factored in, the Block share price is now down a painful 24.4% since this time last month.
So, what's going on?
Image source: Getty Images
Is the party over for ASX BNPL shares?
It's not just the Block share price that's had a bad month. It's been a rough time across the buy now, pay later sector.
Since 8 August the Zip Co Ltd (ASX: ZIP) share price, for example, has dropped 33.1%.
And Sezzle Inc (ASX: SZL) shares have cratered by 43%.
This comes amid wider pressure on equities in general, and tech shares specifically.
The NASDAQ fell 0.7% yesterday, the seventh consecutive day of losses for the tech-heavy index. The NASDAQ is now down 27.1% year to date.
The Block share price and most growth shares have been hit hard by the aggressive tightening policies of central banks.
The United States Federal Reserve, the European Central Bank, and the Reserve Bank of Australia, among others, are all ratcheting up interest rates to combat soaring inflation, with the RBA lifting rates by another 0.5% yesterday.
Growth shares tend to be priced with future earnings in mind and, as rates rise, so too does the present cost of those future earnings.
BNPL shares look to be facing additional headwinds, with the double impact of inflation and rising rates likely to see more customers struggling to make their repayments. The industry is already facing headwinds from rising bad debts.
Block share price snapshot
Since listing on the ASX on 20 January, the Block share price has tumbled 46%. That compares to an 8% loss posted by the S&P/ASX 200 Index (ASX: XJO) over that same period.
