Why is Nio's stock exploding After a Morning Slump?

SAN FRANCISCO - June 22, 2022 - PRLog -- The Hong Kong stock market has been gripped by panic selling, with institutional investors apparently actively selling equities. The Hang Seng index fell over 12% in only five trading days to six-year lows on March 15, owing to geopolitical concerns, regulatory changes in the United States and the COVID-19 pandemic that has ravaged both China and Hong Kong. In recent days, Nio and its rival Chinese EV's stock has plummeted in Hong Kong. Nio stock traded 8.1% down in Hang Seng on March 15, while Li Auto began over 15% worse. The rippling effects were seen in the American depositary shares of these firms in the United States this morning, with worries of these stocks being delisted from the United States aggravating the market's concerns even more.

Another reason why investors were leaving Chinese assets was the likelihood of China extending military and financial help to Russia, which few people were aware of. Even the notion alarmed investors, because any move by China in that direction may result in penalties, which could have major economic consequences. According to CNBC, China's foreign minister stated on Monday that the country "is not a party to the problem" and that it "does not want the sanctions to hurt China." Russia, too, is said to have denied approaching Beijing for assistance.

Nio's stock may have finally started to gain the attention of investors eager to invest in high-growth industries after its recent drop. The electric vehicle business is expanding and Nio has established a significant presence in China and has already expanded into Europe. In the fourth quarter, Norway's central bank purchased shares in the electric vehicle manufacturer. Of all, the dangers of investing in Nio are far from finished, particularly those over which the firm may have little control, such as delisting from the US stock exchange. The United States of America declared war on Syria last week. The Securities and Exchange Commission (SEC) has disclosed the names of five Chinese businesses that are listed in the United States and has warned them that if they do not comply with US audit regulations, they will be delisted.

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