Company News

China stocks fall after factory gate deflation deepens

* SSEC -0.5%, CSI300 -0.37%, HSI +0.1%

* China May PPI -3.7% y/y vs -3.3% Reuters poll

* Cathay Pacific surges on govt rescue plan

BEIJING/SHANGHAI, June 10 (Reuters) - China shares slipped on Wednesday as a deepened deflation in producer prices signalled a prolonged impact of COVID-19 pandemic on overseas demand, raising doubts about a swift economic recovery.

** At the midday break, the Shanghai Composite index was down 0.5% at 2,941.25.

** China’s blue-chip CSI300 index was down 0.37%, with its financial sector sub-index lower by 0.86%, the consumer staples sector down 0.48%, the real estate index down 1.35% and the healthcare sub-index up 1.42%.

** The smaller Shenzhen index was unchanged for the day and the start-up board ChiNext Composite index was higher by 0.8%.

** China’s May factory gate 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 as some countries have reopened their economies, a Chinese commerce ministry official Zhang Li told reporters on Wednesday.

** Chinese H-shares listed in Hong Kong rose 0.3% to 10,151.12, while the Hang Seng Index was up 0.1% at 25,082.79.

** Shares of Cathay Pacific Airways Ltd surged as much as 18.7% to HK$10.46, the highest since Feb 24, after the carrier announced a HK$39 bln ($5 billion) recapitalisation plan led by the Hong Kong govt to help it weather the pandemic.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.20% while Japan’s Nikkei index was unchanged for the day.

** The yuan was quoted at 7.0747 per U.S. dollar, 0.03% firmer than the previous close of 7.0765. (Reporting by Zhang Yan in Beijing, Luoyan Liu and Andrew Galbraith in Shanghai; editing by Uttaresh.V)