Nio (ticker: NIO) stock jumped after the Chinese EV maker announced its brand new car. However, this new strategy might be more inspired by hopes for the Chinese economy than any individual car.
Nio stock climbed 19%, landing at $18.97 by midday trading on Tuesday. It is expected that the company will reveal its much anticipated ES7 SUV that it previously teased. The hope of this unveiling is that it will help drive new sales through 2022.
Even with this, Nio is benefiting from what looks like the reassessment of Chinese stocks by investors. While the S&P has dropped nearly 0.3% and the Dow Jones Industrial Average is down 0.5%, the iShares MSCI China EFT (ticker: MCHI) has gained 3.1%. That climb alone has helped give not only Nio but other companies a boost. The others, Li Auto (ticker: LI) gained 12%, XPeng (ticker: XPEV) has risen 7.8%, and Alibaba Group Holdings (ticker: BABA) is up 6.7%.
The fact that the economy is starting to slowly reopen has brought Chinese stocks, which were previously in the doldrums, a boost. After another series of near lockdowns, the economy is reopening, even as policymakers start to take necessary steps to ease monetary conditions at a time when the U.S Federal Reserve is determined to raise interest rates by the highest level since the 1990s.
As investors keenly watch all that is transpiring in the U.S with much agitation, many are looking to China as a more favourable option to park their money as they wait out the storm.