SHANGHAI: China shares ended higher on Monday, turning around from early losses as data signalling slow factory deflation reinforced hopes of an economic recovery from the pandemic-driven lockdown.

At the close, the Shanghai Composite index was up 0.75% at 3,379.25, after earlier falling as much as 0.57%.

The blue-chip CSI300 index was up 0.36%, clawing back from a 1.31% fall.

The CSI financial sector sub-index ended 1.34% higher, the consumer staples sector added 0.11%, the real estate index jumped 3.08% and the healthcare sub-index closed 0.62% lower.

The smaller Shenzhen index ended up 0.21% and the start-up board ChiNext Composite index was weaker by 0.534%.

So far this year, the Shanghai stock index gained 10.8% and the CSI300 has risen 15.3%, while China's H-share index listed in Hong Kong dropped 10.4%. Shanghai stocks rose 2.09% so far this month.

The broader market gains came after data showed that China's factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of economic recovery.

But Sino-US tensions are expected to continue to weigh on sentiment after Beijing's top representative office in Hong Kong denounced sanctions imposed by Washington on senior Hong Kong and Chinese officials.

The sanctions came ahead of a Taiwan visit on Monday by US Health Secretary Alex Azar, the highest-level US official to visit the island in four decades. China has condemned the trip and promised retaliation.