What's Going On With Nio Stock?

NIO Inc NIO shares are trading higher Tuesday. Several Chinese stocks appear to be getting a lift from new reports suggesting China is considering introducing a 2 trillion yuan ($278 billion) stock market rescue package.

What To Know: According to a Bloomberg report citing people familiar with the matter, Chinese authorities are weighing potential measures to stabilize its stock market.

The plans include the potential mobilization of 2 trillion yuan mainly from offshore accounts of Chinese state-owned enterprises. Authorities have also reportedly earmarked at least 300 billion yuan of local funds to invest in onshore shares.

The news comes as China’s benchmark CSI 300 Index fell to five-year lows this week. The report indicates that a potential stabilization fund has been contemplated since at least October.

“The potential support package should be able to stem declines in the short term and stabilize markets into the Lunar New Year, but state buying alone has historically had limited success in turning around market sentiment if not followed up by further measures,” said Marvin Chen, Bloomberg Intelligence strategist.

Nio shares hit new 52-week lows last week as several US-listed Chinese stocks tumbled after China missed GDP and retail sales estimates.

Nio shares have also battled selling pressure in recent sessions as several competitors have continued to lower prices on vehicles in China, including Tesla, which slashed prices by as much as 6% on several models in China again last week amid increasing competition.

See Also: Toyota Chairman Projects Mere 30% Maximum Market Share For Battery Electric Vehicles

NIO Price Action: Nio shares were up 6.69% at $6.38 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Nio.