Europe close: Stocks edge up amid soft Chinese inflation data

European shares were lower on Monday as data showed China's factory-gate prices slumped in June, while consumer inflation in the Asian giant was at its slowest since 2021.

China's economy was a key driver of activity in the likes of Germany and subdued prices spoke of similarly tepid demand growth.

The pan-regional Stoxx 600 index was up 0.18% at 448.47, with all major bourses slightly higher alongside.

France's Cac-40 outperformed, pushing higher by 0.45% to 7,143.69.

The yield on the benchmark two-year German government debt was roughly flat at 3.329%.

Producer prices in China slumped again in June, according to figures released on Monday by the National Bureau of Statistics, fuelling concerns about deflation.

Producer price inflation fell 5.4% year-on-year in June from -4.6% a month earlier and versus expectations of a 5% drop. This marked the worse decline since December 2015.

Meanwhile, the consumer price index slowed to 0% in June year-on-year from 0.2% in May, coming in below consensus expectations for it to remain at 0.2%. This marked the lowest reading since February 2021.

"Lower inflation and producer prices readings combined to stoke fears of deflation and a further weakening of demand. The reports were a stark reminder that the economy is in need of an injection of stimulus to resume its recovery, with any number of data points indicating a broad-based evaporation of sentiment after an initially positive reaction to the country’s reopening," said Interactive Investor head of markets Richard Hunter.

In equity news Idorsia shares edged up as the pharma company's insomia drug was added to the performance list of US pharmacy group CVS.