Manufacturing PMI unexpectedly falls
Nonmanufacturing PMI falls, as services slow
PMIs show economic recovery losing steam
Markets skid on PMI weakness

BEIJING, May 31 Reuters China39;s factory activity shrank faster than expected in May on weakening demand, heaping pressure on policymakers to shore up a patchy economic recovery and knocking Asian financial markets lower.

The official manufacturing purchasing managers39; index PMI fell to a fivemonth low of 48.8, the National Bureau of Statistics NBS said on Wednesday, down from 49.2 in April and below the 50point mark that separates expansion from contraction. The PMI also dashed forecasts for an increase to 49.4.

Service sector activity expanded at the slowest pace in four months in May, with the official nonmanufacturing PMI falling to 54.5 from 56.4.

The readings pushed markets in Asia into the red with the yuan and Australian and New Zealand dollars tumbling and regional stocks falling sharply.

The PMI data reveal that China may heading to a Kshaped recovery, said Bruce Pang, chief economist at Jones Lang LaSalle.

The sluggish domestic demand could weigh on China39;s sustainable growth, if there are no efficient and effective policy moves to engineer a broadbased recovery, said Pang.

The PMIs also echoed weak factory data from other parts of Asia with Japan reporting a surprise decline in output and South Korean production weakening.

The world39;s secondlargest economy is emerging from three years of…