Key questions include whether Trump will push ahead with repealing the Inflation Reduction Act and how sectors such as energy might be impacted, potentially good news for oil and gas at the expense of renewables, although this is not certain. Green energy stocks are among the losers globally in early trading.
“Assuming a Trump win is confirmed, we expect to see initial sentiment hit across the renewable sector,” opined Citigroup Inc. analyst Jenny Ping. “We expect to see some differentiation between renewable technologies, with those exposed to offshore wind potentially more at risk.”
Emerging economies have also seen rapid reaction to the likelihood of a Trump win, with Asian stocks and currencies including the Japanese yen taking a hit. With a tough stance on China and tariffs on the agenda, markets view Trump as a risk for EMs. The lira was an outlier overnight with hedge funds among the investors favoring the Turkish currency.
European market analysts are also expecting a negative impact from a Trump administration. Andrzej Szczepaniak, European economist at Nomura told Reuters what he expects.
“Trump’s universal tariffs plan is expected to have a substantial impact on the already fragile Eurozone economy, while the inflationary effects for Europe will be more limited,” he said. “This could trigger an even more accelerated rate cutting cycle path from the ECB and will likely lead to a greater divergence between the US and European policy rates.”
