June 10, 2020 / 7:37 AM / 2 months ago

China stocks end lower as factory gate deflation deepens

* SSEC -0.42%, CSI300 -0.18%

* China factory gate deflation deepens on weak global demand

* Battery maker EVE Energy surges on buy rating

BEIJING, June 10 (Reuters) - China stocks ended lower on Wednesday as deepening deflation in the country’s producer prices underlined the economic impact of the COVID-19 pandemic on overseas demand, raising doubts about a swift economic recovery.

** At the close, the Shanghai Composite index was down 0.42% at 2,943.75.

** The blue-chip CSI300 index was down 0.18%, with its financial sector sub-index lower by 0.92%, the consumer staples sector down 0.21%, the real estate index down 1.27% and the healthcare sub-index up 1.77%.

** The smaller Shenzhen index ended up 0.3% and the start-up board ChiNext Composite index was higher by 0.94%.

** China’s producer prices fell by the sharpest rate in more than four years, underscoring pressure on the manufacturing sector as the COVID-19 pandemic reduces trade flows and global demand.

** It will take some time for foreign demand to recover even though some countries have reopened their economies, Chinese commerce ministry official Zhang Li told reporters on Wednesday.

** Shares in Chinese battery maker EVE Energy Co Ltd climbed as much as 9.8% to 42.66 yuan, their highest since Feb 25, 2019, as a brokerage rated the stock at “buy”.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.41%, while Japan’s Nikkei index closed up 0.15%.

** At 0708 GMT, the yuan was quoted at 7.07 per U.S. dollar, 0.09% firmer than the previous close of 7.0765.

Reporting by Zhang Yan in Beijing, and Andrew Galbraith in Shanghai

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