Waaree Energies to NTPC Green: How are renewable energy stocks performing amid the market fall?

Amid the global challenges affecting Indian markets, renewable energy stocks are also experiencing volatility. Most renewable power stocks have recorded significant dips in their share prices due to a lacklustre Q3 earnings season, global and domestic factors, and company-specific events.

Indian stock markets have witnessed a downward trend in the last couple of weeks. On Tuesday, March 4, the benchmark NIFTY50 was down 0.28% to 22,088 at 2:30 pm.

Foreign investors have been selling persistently, giving away Indian equities worth nearly $25 billion since September 2024. Factors including deepening trade war worries, uncertainties around a slowing US economy and weakening of the Indian rupee for the fifth consecutive month in February 2025 have also hammered the domestic market in the current scenario.

The benchmark NIFTY50 has dropped 16% from its all-time high of 26,277 on September 27, 2024.

Renewable Energy stocks decline up to 58% amid market fall

Renewable energy stocks have declined up to 58% in the past six months amid the drop in the benchmark NIFTY from its peak.

Key triggers for renewable energy stocks' decline

Multiple factors have triggered the decline in renewable energy stocks, including domestic issues and global uncertainties.

On January 20, 2025, Donald Trump took oath as the 47th president of the United States and made key announcements on reshaping the United States' energy policy the next day.

Trump declared a national energy emergency to boost oil and gas production and roll back or halt incentives for renewable energy due to insufficient infrastructure and energy supply. This shift in policy raised concerns about reduced global investment in renewables, significantly affecting international and domestic energy markets.

According to Trump's order, all federal agencies were directed to immediately suspend the allocation of funds under the Inflation Reduction Act (IRA). IRA is a climate law implemented during the Biden administration to financially support clean energy initiatives.

Further, the Union Budget 2025 covered significant strides in nuclear expansion, clean technology manufacturing, and critical minerals. It did not mention any new financial incentives for onshore or offshore wind projects, and it did not include additional incentives for green hydrogen production, transport, or export, among other expectations.

The recent downward trend in renewable energy stocks has been witnessed amid the cautious approach of investors in the broader market. The benchmark indices have been trading in negative territory due to heavy sell-offs by foreign investors, global turmoil over the US tariff issue, and the declining rupee against the dollar, among other factors.