Clean-energy investors thrown for a loop

Investors riding the prospects of Joe Biden’s $2 trillion clean energy plan have been thrown for a loop as a drawn-out vote count illustrates how much influence the outcome of the U.S. election will have on the world’s shift away from reliance on fossil fuels.

The S&P Global Clean Energy Index, made up of 30 companies from around theworld, surged toward a record Thursday, bouncing back from losses a day earlier, as Biden’s path to victory in the presidential race appeared clearer and Republicans’ ability to maintain control of the Senate looked less certain.

Alternative energy stocks surged in recent months as investors weighed the prospect of Democrats controlling the White House and Congress, which would allow them to aggressively push toward renewables and away from fossil fuels. Investors became wary ahead of Election Day as shares had outperformed and analysts began downgrading some recommendations.

Thursday’s rebound cameas investors reassessed the industry’s prospects under whatever power dynamic ultimately takes shape in

Washington. RBC strategist Helima Croft pointed out that a Biden administration would still have the power to push clean energy use even with a divided Congress.

“There remains significant scope to use executive action and federal regulation that can advance goals for solar panels, wind turbines, EV charging stations, emissions and the like,” Croft wrote in a research note.

Jink o Solar Holding Co. and SunPower Corp. were among those rebounding from Wednesday’s drop, both posting double-digit gains. Meanwhile, Chinese electric vehicle maker Nio Inc. rallied to a record in U.S. trading, pushing its market value past that of General Motors Co.

“All hope is not lost even with a Republican Senate,” said Michael Weinstein, an analyst at Credit Suisse Group AG.

Before the election, investors had priced in a high likelihood of an extension to solar’s investment tax credit, and even a split Congress doesn’t completely eliminate that possibility, Weinstein said.

The S&P clean energy index climbed 6.6 percent Thursday, the most since March, to close within1 percent of its Oct. 9 record high.

It’s up 79 percent this year.

Many clean energy companies are well positioned to achieve rapid growth under the global transition away from fossil fuels, Morgan Stanley analysts told clients in a note Wednesday. Even so, the bank chose to downgrade First Solar Inc. to sell-equivalent, saying shares are likely tomove lower regardless of the election outcome after the stock rallied more than 50 percent this year.

Electric vehicle companies, seen as big gainers even under a Biden win with a split Congress, continued their share gains from Wednesday.