The ASX is tanking again with former tech stock darlings including Afterpay shares getting walloped

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The ASX 200 index has slumped 55 points or 0.9 per cent to 6,196 in late morning Thursday trade.

This follows yesterday’s 1 per cent fall in the Australian share market, its worst day for almost 6 months.

The catalyst for today’s fall was overnight falls in US stocks, particularly technology shares, after Facebook and Twitter executives faced sceptical US lawmakers.

Technology stocks have been running hot in the US, with companies like Alphabet, Amazon, Netflix and Apple posting big gains so far this year.

Quoted in the Wall Street Journal, Frank Cappelleri, executive director at Instinet said that after a big run-up, “people are just looking for a reason to take profits.”

ASX tech stocks hammered

That same mentality looks to have taken hold on the ASX on Thursday, with many of the popular ASX tech stocks taking a hammering.

Until recently, Afterpay (ASX:APT) shares have been amongst the hottest ASX 200 stocks, with the APT share price seemingly going up in virtually a straight line.

In a sign of the euphoria surrounding the ‘buy now pay later’ payment technology company, the Afterpay share price soared 21 per cent higher to $22.50 on the resumption of trade after announcing it was expanding into the UK.

It’s been all downhill from there for the Afterpay share price, with losses accelerating today. In lunchtime trade, Afterpay shares are down 59 cents or 3.5 per cent to $16.13 after earlier trading as low as $15.32.

Other tech darlings hitting the skids today include Xero (ASX:XRO), its shares falling $2.79 or 5.7 per cent to $45.96. The Xero share price peaked last month at $52.57.

The Appen (ASX:APX) share price has fallen 70 cents or 4.7 per cent to $14.24. Appen shares hit a record high of $16 late last month.

Altium (ASX:ALU) shares are also on the nose, losing $1.44 or 5.3 per cent to $25.78. The Altium share price traded above $30 last month.

ASX 200 back below 6,000

Quoted on Business Insider, Bell Potter’s Richard Coppleson said “to me the market looks like it’s in the death throes for a nasty month” following five straight months of gains where the ASX200 rose by 9.7 per cent.

The article went on to quote Coppleson as saying he is “very cautious on markets over the next 6 weeks. If I’m correct we’ll see the the ASX200 back below 6,000.”

Telstra (ASX:TLS) shares defied the ASX’s weakness, rising 10 cents or 3.3 per cent to $3.12 despite trimming earnings guidance on slower NBN roll out. 

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Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
Bruce Jackson has 30 years of hands on investing experience. He is passionate about stock market investing, running his own portfolio and SMSF. His focus is on small cap growth stocks. You can contact Bruce at brucej@thecapitalclub.com.au