Donald Trump's victory in the US presidential election reverberated across global stock markets on Wednesday as investors eager to back winners and sell expected losers from his victory.

winner

Tesla

Tesla, whose CEO Elon Musk has become one of Trump's most vocal supporters, rose nearly 15 percent in premarket trading.

Musk, who has contributed more than $100 million to the pro-Republican America Pac, was promised a role heading a government efficiency division in a second Trump administration.

When Trump announced his victory in Florida, he told his supporters: “A star is born. . . Elon” and praised the Tesla boss as a “super genius”.

Shares of Trump's social media company Truth rose 30 percent before the market opened.

Banks

U.S. bank stocks jumped as investors bet that interest rates would stay high longer under Trump, who is seen as inflationary in his economic policies.

Shares of Goldman Sachs rose 6.8 percent in premarket trading, JPMorgan rose 6.6 percent and Morgan Stanley rose 7 percent.

Manish Kabra, head of U.S. equity strategy at Société Générale, said the prospect of a “red sweep” in which Republicans take control of the White House and both chambers of Congress also includes companies whose fate they are tied to are, would bring broader benefits to the US economy.

“Buy US cyclicality: This means regional banks, private equity, private credit, oil stocks and classic reshoring beneficiaries such as industrial companies,” Kabra said.

Trump's proposed cut in corporate tax rates would also provide “an immediate boost to profits,” he added.

defense

A Trump presidency is expected to bring increased defense spending, particularly among European countries that came under criticism during his first term for failing to meet their NATO commitments

Shares of Lockheed Martin and Northrop Grumman each rose 3 percent premarket.

In Europe, the Stoxx Europe Aerospace and Defense Index jumped 3.4 percent to a record high, with Trump's return seen as a boon for the region's defense industry as he urged NATO members to spend more than 2 percent of their GDP on defense.

“Increased U.S. isolation” would almost certainly boost European defense spending and give a boost to the continent’s defense groups, said Sam Burgess, an equity analyst at Citi.

BAE Systems, Britain's largest defense company, rose 4.4 percent and Rolls-Royce rose more than 4 percent. In Frankfurt, shares of Hensoldt rose by more than 3 percent, while in Milan, shares of Leonardo, one of Italy's largest defense companies, rose by 3.8 percent.

Oil and gas companies

Trump courted oil companies during his campaign, vowed to destroy much of President Joe Biden's environmental and climate agenda and urged the industry to “drill, baby, drill.”

ExxonMobil, the largest oil company, and rival Chevron both rose more than 3 percent in premarket trading, although a stronger dollar weighed on oil prices.

loser

Renewable energy

In contrast, renewable energy companies in Europe slumped amid fears that Trump would eliminate the Biden administration's tax breaks and subsidies.

Denmark's Ørsted, the world's largest developer of offshore wind farms, fell 14 percent, while Danish turbine maker Vestas lost 10 percent.

The S&P Global Clean Energy Index, which tracks the world's largest clean energy companies, fell nearly 2 percent.

Industry executives were prepared for a Trump victory, and Sean McGarvey, president of North America's Building Trade Unions, said at a conference last week that a Trump victory would be “terrible” for the emerging U.S. offshore wind industry.

Joe Biden's administration has accelerated the expansion of offshore wind energy, setting a goal of generating 30 GW of offshore wind energy by 2030. Trump has vowed to halt projects on the “first” day of the new administration.

Dutiable sectors

The prospect that Trump could impose a series of new tariffs weighed on shares of European automakers. Trump has announced that he will impose high tariffs on imports, with a plan to impose tariffs on goods from Europe of 20 percent for Europe and 60 percent for China.

The broad-based auto and parts index Stoxx 600 fell 2 percent, with looming tariffs on imported cars, including from Mexico and the EU, weighing on German companies such as BMW and Volkswagen, which fell as much as 6 and 3 percent respectively.

Additional reporting by Mari Novik, Sylvia Pfeifer and Rachel Millard