What happened
The S&P/ASX 200 Information Technology Index plunged 2.6 per cent as local equities recorded a flat start to the week. The decline followed a weak U.S. trading session where the Nasdaq fell 0.29 per cent and the Dow Jones dropped 0.51 per cent.
Why it matters here
Local technology valuations rely heavily on sentiment from United States tech markets. When offshore markets decline, Australian growth stocks often re-rate quickly. Investors holding high-P/E growth stocks should prepare for heightened short-term price volatility whenever global risk appetite wanes.
What to watch
Overnight US tech market momentum and upcoming inflation readings, which will guide global discount rates and valuations for ASX growth equities.
Source
fool.com.au