May 25 - Asian shares hit their lowest levels for the year, after manufacturing activity in the euro zone shrinks to its lowest since June 2009, and China heads for soft H1.
Asian shares hit their lowest levels for the year, as early bargain hunting gave way to worries about weak global growth and Europe's debt problems. Stocks outside Japan are heading for a third straight week of losses, after manufacturing activity in the euro zone shrank to their lowest since June 2009, with indicators pointing to deteriorating growth ahead. Investors also reacted to a seventh consecutive fall in China's factory activity, that signals sluggish growth for the world's second largest economy in the first half. Saxo Capital Markets economist Steen Jakobsen says China and Europe will continue to dictate market sentiment. (SOUNDBITE) (English) SAXO CAPITAL MARKETS CHIEF ECONOMIST, STEEN JAKOBSEN, SAYING: "I think we have two major risk concerns right now, one being the already very widely debated issue on Greece, where we don't know what will happen on June 17, but it looks like it would be just another grey non-decisive situation. And then after 17th of June, the Europe needs to sit down and figure out how they deal with this crisis. Then the other big tail risk or event risk right now is China and how they will be able or not to reset themselves and get on the road to more growth." Latest poll data shows Greece's anti-bailout leftist SYRIZA party maintaining its lead, ahead of the elections which may determine whether the country remains inside the common currency bloc. Seoul shares bucked the weaker trend, edging up Friday to snap a two-week run of losses. The Kospi is on track to close over two percent higher this week. But markets in Tokyo, Hong Kong and Sydney are all headed for weekly losses. Arnold Gay, Reuters.