China’s slowdown worsens as factories hit by fall in demand at home and abroad

China’s slowdown worsened in May as its factories saw a further deterioration in demand at home and abroad, dealing a new blow to a global economy struggling with a sharp downturn in Europe and a faltering recovery in the United States.

The darkening outlook was underlined by data showing the fourth monthly decline this year in exports from South Korea, the first major economy to report May numbers, as shipments to the United States, Europe and China all fell.

Equities, the euro and growth-linked currencies all fell after yesterday’s gloomy data, which followed reports on Thursday showing India’s growth at its weakest in nine years.