'Trump risk' starts to unnerve Korean stock market

Republican presidential candidate and former U.S. President Donald Trump gestures during his New Hampshire presidential primary election night watch party, in Nashua, New Hampshire, Tuesday (local time). Reuters-Yonhap

The Korean stock market appears to be unnerved by the prospect of former U.S. President Donald Trump emerging as a potential Republican presidential candidate. This apprehension stems from his skepticism toward green campaigns, which many Korean businesses leverage for profit.

Trump achieved a resounding victory over his Republican competitor, Nikkei Haley, in the New Hampshire primary on Tuesday (local time). This success brings him one step closer to a potential rematch in the election against U.S. President Joe Biden.

The former U.S. president wants to scrap the Inflation Reduction Act, Biden’s signature climate law aimed at offering $369 billion in tax breaks and subsidies for clean energy.

The major beneficiaries of the IRA in Korea are secondary battery makers that are building plants in America after Biden took office.

Under the circumstances, shares of Korea’s No. 1 battery manufacturer LG Energy Solution managed to advance 1.87 percent to end at 380,500 won ($284) on the benchmark KOSPI, Wednesday. But it mostly retreated on a daily basis over the 17 trading days of this year, after wrapping up 2023 at 427,500 won.

SK Innovation, the parent company of SK On, another battery maker, gained 2.09 percent to close at 112,100 won. But such gains only took place twice this year, including Tuesday when it advanced 1.38 percent from a day earlier, while being on a losing streak for the rest of the trading days.

Concerning renewable energy stocks, market observers are downgrading the outlooks with the possibility of Trump’s return to presidency.

The corresponding companies are Hanwha Solutions, HD Hyundai Energy Solutions, OCI – all of them solar companies.