Shares of Nio Inc. (NIO) took a significant plunge of 9.9% this morning, reaching a three-year low. The stock experienced this decline in the aftermath of a highly anticipated meeting between U.S. President Joe Biden and China President Xi Jinping, which yielded no new agreements on the economic front. Additionally, China-based e-commerce giant Alibaba Group Holding Ltd.’s (BABA) earnings report featured downbeat comments on China-U.S. relations, further pressuring Nio’s stock price.
Nio’s stock had previously seen a surge of 10% during the last two sessions, but it is now on track to close at its lowest level since June 2020. This downward trend extended to other China-based electric vehicle (EV) makers as well, with Xpeng Inc. (XPEV) experiencing a 7.5% slump in its shares, while Li Auto Inc. (LI) witnessed a 5.0% decrease. Tesla Inc. (TSLA), which relies on China for 21.5% of its total third-quarter sales, also saw its shares drop by 3.3%.
The negative sentiment surrounding China’s economic landscape had a broader impact, as the iShares MSCI China ETF (MCHI) sank by 3.9%, and the S&P 500 (SPX) experienced a slight dip of 0.2%.
Key Takeaways:
- Nio Inc. (NIO) shares plummeted by 9.9% towards a three-year low following the unproductive meeting between President Biden and President Xi Jinping.
- China-based EV makers Xpeng Inc. (XPEV) and Li Auto Inc. (LI) experienced significant share declines as well.
- Tesla Inc. (TSLA), heavily reliant on China for a substantial portion of its sales, saw a corresponding drop in its stock price.
- Overall, the negative impact was also reflected in the iShares MSCI China ETF (MCHI) and the S&P 500 (SPX).