Markets are loving Joe Biden’s turn as America’s president. Wall Street's main indexes opened near record highs on Thursday as investors counted on more pandemic relief and speedy vaccine roll-outs under the Biden administration to support the economy after data showed a weakening labour market recovery.
Biden’s formal transition into the White House has cemented investors’ faith in companies allied to his policies, while those that don’t meet his priorities are losing out. Stocks tied to clean energy rose, continuing gains they have made since Biden won the election. Defence equipment makers and prison operators — sectors that did well under Donald Trump — dropped. Here’s what’s moving markets as Biden takes office.
Renewables in favour
Some clean energy stocks in South Korea and Japan rose on Thursday as Biden signed sweeping actions to combat climate change just hours after taking office. South Korea’s OCI Co, a solar equipment maker, rose as much as 9 per cent on and Japan’s West Holdings gained 4.5 per cent.
Jails pounded
Shares of US private prison operators, long a target of Democrats, tumbled. CoreCivic Inc declined over 7.8 per cent and Geo Group fell over 4.1 per cent. Shares of both companies dropped the most since Dec. 22.
Defence drops
Asian defence stocks dropped on expectations that Biden’s less confrontational policies would dampen global geopolitical risks and the need to ramp up spending on the sector. Japanese rifle maker Howa Machinery fell 7.8 per cent while Australian defense shipbuilder Austal, which gets around 77 per cent of its revenue from the US, declined 2.7 per cent.
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