A view of the American electric car maker Tesla's store.  (Source = EPA Association)

Tesla soars 3% despite the sharp drop in Nasdaq… Rechargeable batteries are mixed in the Korean stock market

A view of the American electric car maker Tesla’s store. (Source = EPA Association)

New York stock markets, including the Nasdaq, fell at the same time as the US Federal Reserve (Fed) hinted at a steep rate hike, but Tesla ended up rising on the contrary. Accordingly, stocks related to rechargeable batteries are showing mixed flows in the domestic stock market.

On the New York Stock Exchange on April 21 (local time), the Dow Jones Industrial Average closed at 34,792.76, down 1.05% from the previous trading day. The Standard & Poor’s (S&P) 500 index fell 1.48% to 4393.66, while the Nasdaq index, which focuses on technology stocks, plunged 2.07% to close at 13174.65.

The reason New York stock markets all closed lower is believed to be due to the hawkish remarks of US Federal Reserve Chairman Jerome Powell (preferring monetary tightening) on ​​the day. At the International Monetary Fund (IMF) debate held on the same day, Chairman Powell said, “It is appropriate to move faster to raise interest rates.” It hinted at the possibility of a ‘big step’ to raise. Earlier, Chairman Powell had hinted that he would start shrinking its current balance sheet, which now stands at nearly $9 trillion. A shrinking balance sheet implies quantitative tightening through the Fed’s asset purchases.

As a result, the yield on the 10-year US Treasury bond rose by more than 10bp during the day to 2.95%, and the yield on the 2-year Treasury note, which is particularly sensitive to monetary policy, rose by 15bp during the day to 2.72%. The New York Stock Exchange, which showed an upward trend at the beginning of the market, turned downward as the Treasury bond yield surged, and maintained a downward trend until the close of the market. In particular, the Nasdaq, which focuses on tech stocks with large fluctuations in stock prices, increased the extent of the decline.

On the other hand, Tesla maintained its uptrend despite the collapsed Nasdaq. On the Nasdaq Stock Exchange on the same day, Tesla closed at $1008.78, up 3.23% from the previous trading day, and regained ‘thousandsla’ again. This is due to the fact that Tesla announced on the 20th (local time) that its earnings exceeded market estimates. Tesla announced that its sales in the first quarter of this year increased 81% year-on-year to $18.76 billion (23.16 trillion won). It surpassed the Wall Street analyst’s estimate of $17.8 billion in sales compiled by Refinitiv, a financial information company. Net profit was $3.32 billion (4.1 trillion won), more than seven times higher than in the same period last year.

As the stock prices of Nasdaq and Tesla showed opposite stock flows, the rechargeable battery industry in the domestic stock market also appeared to be mixed. On April 22, SK IE Technology finished trading at 127,500 won, up 1.59% from the previous trading day. The share price rose to 5.17% during the day, benefiting from the rise in Tesla’s share price. SK IE Technology is a manufacturer of separators for secondary batteries used in electric vehicles, and is tied to secondary battery-related stocks. GI Tech (0.55%) and Easytronics (0.52%) also closed higher.

On the other hand, on the same day, Doosan Fuel Cell closed at 36,500 won, down 3.05% from the previous trading day. Samsung SDI (-2.3%), Wonik P&E (-1.77%), Power Logics (-1.77%), Chunbo (-1.18%), LG Energy Solutions (-0.11%), EcoproBM (-0.17%, L&F (-0.17%) -0.04%)) also drew a downward curve throughout the market and ended lower.

However, the stock market is steadily raising expectations for the growth potential of the rechargeable battery industry. Dongjin Kang, an analyst at Hyundai Motor Securities, said, “The profitability of cylindrical batteries has been strong recently and is expected to improve every quarter.” He continued, “Considering that Tesla has recently recorded the highest profitability in the automobile industry, suppliers that supply batteries to Tesla will also enjoy its profitability and growth potential.” It also explained that the increase in demand for electric vehicles due to a surge in international oil prices will also act as a positive factor.

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