Shares of US-listed Chinese companies saw widespread selloff on Tuesday, with electric car companies Nio and Xpeng Motors no exception, falling by up to nearly 15 percent. Despite the spreading panic, retail investors chose to buy the dip as the stocks plunged.
Nio, Xpeng, and Alibaba were among the six most purchased single stocks through this week, with Nio attracting at least $105 million, Vanda Research said in a report released Wednesday.
The other three most-bought stocks were Apple, AMD, and Tesla, according to the report.
"After last week's record equity purchases, retail activity has been very subdued for the longest part of this week. But as soon as US equities dropped on Chinese contagion fears, the dip-buying army showed up again," the research firm said.
Nio fell nearly 9 percent on Tuesday, Li Auto fell about 14 percent and Xpeng fell nearly 15 percent.
Institutional investors sold off shares over concerns that the companies could be the next target of China's crackdown on data privacy concerns, but retail investors stepped in to buy large amounts of Nio and Xpeng shares, Vanda said.
"Chinese ADRs are the latest example of how retail behavior has changed over the past 4 months. From driving triple-digit returns in high multiple stocks, they have turned into dip buyers in underperforming ones," said Vanda.
Shares of each of those companies rallied sharply on Wednesday, with Nio up 6.3 percent, Xpeng up 7.6 percent, Li Auto up 15.7 percent and Alibaba up 5.3 percent.
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