China-based electric vehicle maker Nio (NYSE:NIO) is one of many Chinese stocks falling in morning trading today. The declines come as China began locking down parts of Beijing in an effort to prevent Covid-19 from spreading in the capital city. NIO stock is currently down less than 1%, after stumbling 3% in the pre-market session.
According to the South China Morning Post, “Beijing… has locked down dozens of residential compounds.” The news led to huge declines on Chinese stock exchanges today, with The Shanghai Composite tumbling 5.1%, its largest single-day decline in more than two years.
What Is Happening With NIO Stock Today
Before today, U.S. investors had focused on lockdowns in Shanghai, where Nio and many other major companies, including a number of Nio’s suppliers, have factories. The lockdowns in Shanghai have been in place for over a month.
On April 14, however, Nio reportedly restarted production of its EVs after a brief halt. The company had suspended production due to issues that its suppliers were experiencing.
“Nio’s supply chain will eventually return to normal. And the disruption will have minimal long-term damage to its business for several reasons,” InvestorPlace contributor Chris Lau contended last week. He noted that Nio is also entering markets aside from China.
Nomura analyst Martin Heung issued a bullish note on NIO stock on April 14, reporting that the company had only stopped manufacturing EVs on weekends. Heung kept a $51.50 price target on the shares, along with a “buy” recommendation.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
