A gauge of Australia’s technology shares has advanced 20% so far in the second quarter, outperforming peers in the US and Asia as expectations of near-peak interest rates added to the artificial intelligence-driven momentum in the sector. A rotation from finance shares into technology firms also helped the S&P/ASX 200 Information Technology Index to be on track for its best three months since Dec. 2020.

“We are positive on the Australia technology sector more broadly given their defensive growth nature as macro conditions remain uncertain” and longer-term structural growth trends continue, said UBS analyst Lucy Huang.