Sembcorp Industries Ltd (U96.SI) experienced a surprising 3.21% plunge in pre-market trading on Wednesday, despite announcing a potentially promising joint venture agreement. This unexpected downturn follows a significant 7.6% gain in the previous session, suggesting a possible correction or profit-taking by investors.

The company revealed that its wholly owned subsidiary, Sembcorp Green Hydrogen India, has entered into a joint venture agreement with Bharat Petroleum Corporation Limited (BPCL), a state-owned Indian oil and gas company. This partnership aims to explore renewable energy and green hydrogen projects across India, supporting the country's energy transition and development goals. Despite the seemingly positive nature of this announcement, the market's initial reaction has been negative.

The reasons behind this counterintuitive stock movement remain unclear. It's possible that investors are cautiously assessing the long-term implications and potential risks associated with the joint venture. Alternatively, the sharp decline could be attributed to profit-taking following Tuesday's substantial gains, or influenced by broader market trends. Sembcorp Industries stated that this joint venture is not expected to have a material impact on the company's earnings per share and net tangible assets per share for the financial year ending December 2025, which may have tempered investor enthusiasm.

Sembcorp drops 2.25% at 11:23 am, Apr 9th.