Confusion Cleared, New York Stock Market Starts Strong... Tesla and Plug Power Surge

by Paek Jongmin

Published 08 Jan.2021 00:02(KST)

[Image source=EPA Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] As the U.S. Congress certified President-elect Joe Biden's victory, the New York stock market opened with a strong upward trend.

Tesla, expected to benefit from eco-friendly policies, is showing nearly a 5% rise, approaching the $800 mark. The stock price of Plug Power, a hydrogen company invested in by SK, is also showing a strong surge.

As of 9:40 a.m. local time on the 7th, the Dow Jones Industrial Average is up 0.39%, the S&P 500 index is up 0.91%, and the Nasdaq index is up 1.59%. The Russell 2000 index, focused on small and medium-sized enterprises, has surged by 3.98%.

On the other hand, the 'VIX,' known as the fear index, has fallen by nearly 10%.

Early that day, as the U.S. Congress recognized Biden's victory, investor sentiment stabilized. Although the Democratic Party secured two seats in the Georgia Senate runoff elections, gaining majority status in the Senate, it no longer shook the market.

Experts predict that although the Democrats secured 50 Senate seats and, with the Vice President's casting vote, hold the majority, tax reforms such as corporate tax increases will be difficult due to the limited number of seats. However, fiscal expansion policies such as a $2,000 cash payment to all citizens are expected to gain momentum.

Peter Chir, an analyst at Academy Securities, explained, "The Capitol Hill riot that occurred in Washington a day earlier is a one-time factor. The market is betting on the new government's stimulus measures and changes in tax-related policies."

Electric vehicle maker Tesla, expected to benefit from the Biden administration's eco-friendly policies, surged 4% immediately after the opening, trading at $787. The stock price of Chinese electric vehicle maker Nio also surged.