Li Auto Inc., a leading Chinese electric vehicle manufacturer, saw its shares surge 9.37% on Monday, September 24, 2024, riding the wave of a broader rally in Chinese stocks listed in the U.S. market. This rally was fueled by China's announcement of a massive economic stimulus package aimed at reviving its struggling economy and beleaguered equity markets.
The People's Bank of China (PBOC) unveiled a slew of measures, including a cut in a key short-term interest rate and plans to reduce the amount of cash banks must hold in reserve to the lowest level since at least 2018. These moves were accompanied by a package to shore up China's troubled property sector, lowering borrowing costs on as much as $5.3 trillion in mortgages and easing rules for second-home purchases.
For the nation's equity market, the PBOC announced that it would provide at least 800 billion yuan ($113 billion) in liquidity support and is studying the formation of a stock stabilization fund. The CSI 300 Index, a benchmark for onshore Chinese stocks, rallied as much as 1.8% following the announcement, while a gauge of Chinese shares in Hong Kong climbed more than 3%.