Nomura Holdings Inc. strategists upgraded Chinese stocks to a ‘tactical overweight,’ saying the trade truce between the US and China is a significant positive for the Asian nation’s equities.

The U.S.-China truce trade is on, and the auto industry is center stage, thanks to its reliance on global production hubs and supply chains. Shares in Mercedes-Benz and BMW rallied Monday. The German companies both make sports-utility vehicles in the American south for the U.