The turmoil in stock markets has taken its toll on clean technology shares, which have fallen from the highs reached earlier in the year.

At the peak, the clean technology sector in the US was typically recording gains of around the mid-30 percent levels from the end of the year. However, by mid September, the year-to-date performance figures were more typically in the mid-20 percent levels. Of the three indices we track in the US, the Wilderhill Clean Energy Index (ECO) was the best performer. ECO had peaked at 249.7, a 37% gain on the year. It is still showing the strongest performance of the three, standing at 27% ahead of its end year level, but is more than 7% below its peak.

In terms of the global indices, the S&P Global Clean Energy Index had climbed as much as 43% ahead at its peak while the Wilderhill New Energy Global Innovation Index (NEX) was 36% up on the year end level at one point. NEX has fallen back most and is trading more than 10% below its peak. Year-to-date, NEX now comes bottom of the pile if all five indices (including the US list) are included. However, the S&P Global Clean Energy Index is the best performer year-to-date, recording a gain of more than 38%.

The impact of market volatility on the clean technology sector is clearly above average. All of the indices monitored outperformed benchmarks such as the Dow Jones Industrial (up 10% year to date) or FTSE 100 (up just 2.6% year to date). However, they all fell much more heavily than the broad market indicators (the Dow Jones Industrial is down just 1.7% from its peak and the FTSE100, although underperforming its US counterpart, is down only 3.8% from its peak.

Biofuels has been the segment of the market which has performed worst over recent months. The problems in the biofuels sub-sector are less to do with the sub prime lending turmoil and more to do with the uncertainty which has hit the industry. Biofuels are attracting the attention of global bodies such as OPEC and the WTO – which seek to influence the policies of domestic government on the sector. This has resulted in a lack of visibility which has affected investor appetite for companies in the sector (see ‘Biofuels Briefing’).

Year to date, the wind turbine manufacturers Vestas and Gamesa rank amongst the best performers in the clean technology sector. Players in the sector are benefiting from the rapidly rising demand for wind power (see comment on Vestas in ‘Wind & Wave Wrap’).