Shares of NIO Inc. (NIO) took a nosedive on Tuesday, joining a broader downturn in U.S.-listed Chinese stocks. This selloff follows news that Chinese officials failed to live up to investor expectations for substantial economic stimulus measures. The disappointment sent shockwaves through the Chinese market.
The Hang Seng Index in Hong Kong, a key indicator of Chinese market performance, plummeted over 9%, marking its worst single-day decline since the global financial crisis in October 2008. The mainland’s Shanghai Composite Index also experienced significant volatility, although it managed to close up 4.6% after fluctuating throughout the day.
The underwhelming stimulus news came after weeks of positive performance in Chinese stocks, fueled by optimism surrounding potential fiscal support to revitalize China’s slowing economy. The announcements, however, only included a modest front-loading of 100 billion yuan for 2025 and another 100 billion yuan for construction projects.
Foreign investors, who had been key players in the recent rally of Chinese stocks, reacted swiftly by taking profits. This sell-off extended to U.S.-listed Chinese stocks, including major players like NIO, Li Auto Inc. (LI), XPeng Inc. (XPEV), JD.com Inc. (JD), and Alibaba Inc. (BABA).
Some analysts, such as those at Goldman Sachs, remain cautiously optimistic that China will introduce additional fiscal measures later in the year.
NIO’s stock price, at the time of writing, was down by 6.91% at $6.32, according to Benzinga Pro.
