Shares of Nio (NYSE:NIO) are ending the week on a positive note, with NIO stock up more than 7% on the day. This rally comes even amid mixed price action in the overall market.
While Nio’s rally may not be correlated with U.S. stocks, it is correlated with Chinese equities. We’ve seen this pattern before, so today’s action shouldn’t surprise investors. That’s even as NIO stock opened roughly flat on Friday, at one point down 1% as well.
For astute traders, that was an opportunity on the long side.
The iShares China Large-Cap ETF (NYSEARCA:FXI) also opened lower today before quickly moving higher. Shares of the exchange-traded fund are now up 3% on the session. Others names like Alibaba (NYSE:BABA), Pinduoduo (NASDAQ:PDD) and Xpeng (NYSE:XPEV) are also up nicely on the day.
This rally in Chinese stocks can be attributed to hopes that China will soon curtail some of its Covid-19 restrictions. If that’s the case, it will improve the economy and be good for companies like Apple (NASDAQ:AAPL) and Starbucks (NASDAQ:SBUX), but also for automakers like Li Auto (NASDAQ:LI), Nio and even Tesla (NASDAQ:TSLA).
Some reports say the Chinese economy will fully reopen by mid-2023. If true, that will be a huge win for China and China-based companies as well as a huge win for the world. China is one of the biggest economies in the world and a large supplier for many multinational organizations.
For what it’s worth, positive news regarding China easing its Covid-19 restrictions also helped NIO stock power 21% higher on Wednesday. For the past five days, NIO is up more than 25%.
Breaking Down NIO Stock
Today’s rally can also be attributed to Nio’s November delivery results, which were released on Thursday morning.
Specifically, the automaker delivered 14,178 vehicles in November. That was up more than 40% versus October and up 9% versus the prior one-month record, which was set in June. For 2022, the company has now delivered more than 106,000 vehicles, up 32% year-over-year (YOY).
Adding to the positive results, Nio said it expects to accelerate deliveries and production this month.
Shares of LI stock are up a similar amount to NIO on Friday and the company also reported its monthly delivery results on Thursday. Li Auto posted deliveries of more than 15,000 vehicles last month, up nearly 50% from October. The company has now delivered more than 112,000 vehicles this year.
On the date of publication, Bret Kenwell did not hold (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.