CG Power, GE Vernova and Hitachi Energy gain after Trump restricts foreign grid equipment.
CG Power leads transformer stocks, rising up to 4% in Thursday's trade.
US restrictions on foreign equipment could benefit Indian power equipment makers.
CG Power, GE Vernova, Hitachi Energy Rise Up To 4% After Trump Grid Order
US restrictions on foreign-made power equipment could create opportunities for Indian transformer makers
Transformer Stocks Gain Up To 4% As Trump Restricts Foreign Grid Equipment
Summary
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Shares of CG Power, GE Vernova, Hitachi Energy India and other transformer makers in India rose in Thursday's trading session after US President Donald Trump signed an executive order declaring a national emergency and restricting the use of certain foreign equipment in the US electricity grid.
CG Power was the top gainer among its peers, rising up to 4%, while GE Vernova gained as much as 3%.
Transformers and Rectifiers (India) and Hitachi Energy India rose 2.71% and 2.13%, respectively.
What Trump’s Order Says
The executive order, signed by Trump on Wednesday, is the latest move by Washington to address what it sees as technology threats posed by China.
The order cites what the White House described as an "unusual and extraordinary foreign threat" posed by foreign-made bulk-power systems that may present national security vulnerabilities.
The move follows a decision by the European Commission earlier this year to ban Chinese-made inverters from publicly funded energy projects, Reuters reported.
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However, the order does not impose a blanket ban on all foreign-made grid equipment. Restrictions will depend on determinations by the US Department of Energy involving covered foreign entities and national security risks.
The department can also establish a list of pre-qualified equipment and vendors.
Why Indian Transformer Stocks Are Rising
The development is seen as positive for Indian power equipment makers as restrictions on Chinese equipment could increase opportunities for non-Chinese suppliers in the US market.
India's transformer and power equipment manufacturers could potentially benefit if US utilities and other buyers look to diversify their supply chains away from Chinese suppliers.
Last year, Reuters reported that rogue communication devices not listed in product documents had been found in some Chinese solar power inverters by US experts, adding to concerns around the security of foreign-made equipment used in critical infrastructure.