Norway's sovereign wealth fund, the world's largest, shrank by some 1.68 trillion kroner ($173.2 billion) in the first half of the year, weighed down by tech stocks, the Norwegian central bank said Wednesday.

The fund, in which the state places its oil revenues, posted a negative return of 14.4 percent in the first six months of the year, with its total value dropping to 11.65 trillion kroner ($1.20 trillion) at the end of June.

"Percentage-wise, it's the second-biggest decline for a half-year result" since the fund was created in 1996 "and the biggest decline in kroner", the head of the fund, Nicolai Tangen, said in a presentation.

Since the start of the year, markets have been rocked by rising interest rates and high inflation due in particular to soaring energy prices and the war in Ukraine, all of which are fuelling fears of a recession.

The fund was weighed down primarily by its equity holdings, which declined by 17 percent.

Technology stocks performed particularly poorly during the period, registering a 28-percent fall as the end of restrictions related to the Covid-19 pandemic dragged down giants such as Meta, the parent company of Facebook, Amazon, Apple and Microsoft.

Energy was the only sector where the fund saw a positive development, with those shares up by 13 percent.

Stocks accounted for 68.5 percent of the portfolio at the end of June.

The fund holds stakes in some 9,300 companies and controls around 1.3 percent of global market capitalisation.

The value of its bond investments, which accounted for 28.3 percent of its assets, shrank by 9.3 percent, while its unlisted real estate holdings, which made up three percent of the portfolio, climbed by 7.1 percent.

The fund's placements in unlisted renewable energy projects -- which accounted for just 0.1 percent of its investments -- also plunged by 13.3 percent.

All of the fund's investments are outside Norway, Western Europe's biggest oil and gas exporter, so as to avoid overheating the Norwegian economy.

While the fund -- which is aimed at financing the future needs of Norway's generous welfare state -- lost money during the first half of this year, rising share prices have helped it rebound in the beginning of the second half.

On Wednesday, according to a counter on the central bank's website, the fund was valued at 12.3 trillion kroner ($1.26 trillion).