The US ‘blue wave’ boosts renewable energy shares, with Orsted and Alerion soaring
The market is speculating that there could be a capital flight from artificial intelligence towards sectors favoured by a Democrat-led Congress
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(Il Sole 24 Ore Radiocor) - The ‘blue wave’ in the US mid-term elections is driving global renewable energy shares higher. The Democrats’ landslide victory, which saw them secure a majority in both the House of Representatives and the Senate, is fuelling expectations of policies more favourable to the renewable energy sector.
Investors are hoping for measures that promote the clean energy sector, including the solar and battery sectors, at the expense of the traditional energy sector, which has always been supported by the Republicans. During his election campaign, President Donald Trump had, in fact, backed fossil-fuel companies with the now-famous slogan ‘drill, baby drill’, which came to symbolise his energy policy. Now, however, the tide could be turning, partly thanks to a sector rotation in investment which could see funds shift from AI-related shares to renewable energy stocks. “The so-called ‘blue trade’ is already taking shape, with capital shifting from investments linked to AI development towards sectors favoured by a Democrat-led Congress,” said Anna Wu, investment strategist and founder of Floodlines Research.
Consequently, this morning in Asia, South Korea’s Hanwha Solutions surged by 19 per cent, whilst HD Hyundai Energy Solutions and Oci Holdings gained 12 per cent and 10 per cent respectively. US solar sector shares, including Enphase Energy, SolarEdge Technologies, First Solar and Sunrun, also recorded gains on the Blue Ocean alternative trading platform. Buying in the sector has thus spread to Europe as well: on the Milan Stock Exchange, Alerion and Erg; in Copenhagen, Orsted and Vestas Wind Systems are in the spotlight. In Germany, Sma Solar Technology and Nordex are performing well, whilst in Spain Solaria is the top performer on the Ibex. Even before the mid-term elections, analysts at JP Morgan had stated that a ‘blue wave’ would be a positive factor for clean energy stocks, thanks to greater support in terms of budget allocations, regulatory oversight and authorisations.
