Why Is Li Auto (LI) Stock Down 19% Today?

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Li Auto (NASDAQ:LI) stock is falling on Monday following news that China’s President Xi Jinping will be sticking around for another term.

News of President Xi claiming a third term as ruler of the country isn’t helping out Chinese stocks today, and that includes shares of LI stock. There are concerns that his policies and growing power will have a negative effect on the country’s economy.

A perfect example of this is the Zero Covid policy President Xi has been standing by. This policy has hurt the Chinese economy by keeping workers in lockdowns, which in turn has caused problems for supply chains.

Lockdowns Will Likely Continue

Recent comments from President Xi suggest the Zero Covid policy won’t be going away anytime soon. That means it will likely continue to hamper the country’s economy. This easily explains why shares of LI stock are slipping today.

It’s worth pointing out President Xi holding office for a third term is unheard of. Previously, Chinese presidents were only allowed to serve two terms. Xi got rid of that restriction back in 2018.

All of this isn’t helping LI stock as heavy selling pushes shares lower today. As of this writing, some 30 million shares have changed hands. That’s a major increase over its daily average trading volume of about 9 million units.

LI stock is down 18.8% as of Monday afternoon.

Investors seeking out more stock market news from China are in the right place!

InvestorPlace has all of the latest news explaining how today’s news is affecting Chinese stocks. That includes what’s happening with shares of Xpeng (NYSE:XPEV), Taiwan Semiconductor (NYSE:TSM) and Nio (NYSE:NIO) stocks today. You can find out more at the following links!

More Monday Chinese Stock Market News

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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