Why Is NIO Stock Up 8% Today?


  • Nio (NIO) stock is rallying on Monday, up more than 8% after a couple of positive catalysts.
  • First, other EV stocks are rallying on the day as well. Tesla (TSLA), Xpeng (XPEV) and others are all up nicely on Monday.
  • Second, the People’s Bank of China kept lending rates unchanged, while some expect monetary easing within the next few months.
NIO stock  - Why Is NIO Stock Up 8% Today?

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Shares of Nio (NYSE:NIO) are ripping higher on the day, with NIO stock up about 8% on Monday. It’s been holding those gains for most of the session. The move adds to Friday’s gain as shares climbed more than 3% in the prior session.

Helping Nio along on Monday is a multi-pronged catalyst.

First, there’s a bid in tech stocks generally and EV stocks specifically. Tesla (NASDAQ:TSLA) is up about 4% on the day and pushing session highs. Lucid Motors (NASDAQ:LCID), Fisker (NYSE:FSR) and Rivian (NASDAQ:RIVN) are all notably higher too.

Even more specifically, Chinese EV stocks like Li Auto (NASDAQ:LI) and Xpeng (NYSE:XPEV) are also up on the day.

That brings up the second catalyst: China.

The iShares China Large-Cap ETF (NYSEARCA:FXI) is rallying almost 2% on Monday. That’s as People’s Bank of China (or PBOC) kept its benchmark lending rate unchanged while the “market sees [a] reserve ratio cut as [the] next move.”

“The one-year loan prime rate was kept steady at 3.65% while the five-year LPR was unchanged at 4.3%.” That’s while “several analysts expect Beijing to roll out monetary easing in the coming months to support the economy, as the April data for retail sales, factory production and fixed-asset investment were all below expectations.”

Can This Give NIO Stock a Spark?

When investors look at Monday’s price action in NIO stock, these will be the catalysts — strong price action in tech and EV stocks alongside less aggressive monetary policies out of China.

If the PBOC does, in fact, roll out monetary easing later this year, it should be an additional benefit to Nio, not just in the sense of higher stock prices but also in the hopes of more consumer spending.

That all said, it hasn’t been an easy ride for Nio.

Earlier this month, NIO shares hit a 52-week low at $7.33 on May 2. While the stock is up about 20% from those lows, the rally has done little to improve investor sentiment.

NIO stock is down just 10% so far in 2023; at first glance, that doesn’t seem so bad. But the reality that shares are down more than 60% from the one-year high is certainly disappointing. From an all-time high, shares are down more than 86%.

While the above catalysts are certainly helping NIO stock today, it will need more momentum to carry it higher. Ideally, bulls are looking for a move north of $10 to get more excited.

On the date of publication, Bret Kenwell 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.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/why-is-nio-stock-up-8-today/.

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