Asian factories were buffeted by stronger growth headwinds in June, as crumbling foreign and domestic demand knocked activity in China to multi-month lows and shrank orders for Indian producers for the first time in more than four years.

China's official purchasing managers' index (PMI) showed factory growth stalling last month, while a similar private survey offered a bleaker picture and showed manufacturing activity tumbling to a nine-month low.

The cheerless outlook for the world's factory floor was repeated across Asia as manufacturers, facing belt-tightening by consumers in Europe, the United States and at home, struggled to increase sales.

"The Chinese economy is far from out of the woods yet," said Xianfang Ren, an economist at IHS.

"A few sub-indicators of the PMI have long indicated that the economy is in sharp distress," Ren said, referring to input prices and stocks of purchases, which have both contracted for at least three months in a sign of anemic demand.

Export orders were a weak spot and dropped in bellwether markets for global trade including China, South Korea, Taiwan and Indonesia. And in markets where foreign orders held up, such as India, domestic demand slumped instead.

A rare bright spot was offered by Japan, where big manufacturers' sentiment turned positive in the three months to June for the first time in nearly two years, a closely-watched central bank survey showed.

The improvement in sentiment shown in the Bank of Japan's quarterly "tankan" survey indicated that recent market turbulence has yet to hurt the feel-good mood created by the government's reflationary policies.

OUTLOOK CLOUDED

Struggling factories across Asia cloud the economic outlook at a time when the United States and Europe are struggling to revive their economies. Similar surveys are due later today in the United States and Europe. Investors expect the U.S. ISM survey to show marginal growth.

In China, officials warned that things could worsen.

Zhao Qinghe, a senior statistician at the statistics agency, said after Monday's data that the country's factory growth is likely to founder further and that factories, preparing for glum times, have cut jobs for 13 consecutive months.

China's official PMI slipped to a four-month low of 50.1 in June, just a whisker above the 50-point level that indicates growth.

A separate PMI survey by HSBC and Markit showed activity in Chinese factories sliding to a nine-month trough of 48.2 as export sales skidded, also to a nine-month low.

In India, Asia's third-largest economy, an HSBC PMI edged up to 50.3, even though output shrank for the second month and order books contracted for the first time in four years.

"New orders contracted, led by weaker domestic demand," said Leif Eskesen, an HSBC economist, adding that power shortages in India had also crimped factory output.

In Taiwan, a barometer for global electronic exports, the PMI rose but remained below the 50-point level indicating growth. Export orders and new orders also fell in June, albeit less quickly compared with previous months.

Factories in Indonesia, Southeast Asia's largest economy, also suffered falling export orders, which fell for the first time in four months, even though overall manufacturing activity rose to 51 in June.

In Asia's fourth-largest economy, South Korea, the PMI showed factories suffered their first drop in business in five month after export orders fell. In a sign of the slack in the South Korean economy, inflation is running at its lowest rate since September 1999.

Analysts said the dismal data raised doubts about whether trade-reliant South Korea can meet its government's economic growth target of 2.7 percent this year.

China's economic growth target is also increasingly under threat.

Even though Monday's downbeat PMI showed that the Chinese economy is losing momentum, Beijing looks increasingly reluctant to take policy action to stimulate activity.

China's new leaders, who have been in office for three months, appear to want to take a different tack from their predecessors when it comes to running the economy, and have instructed officials to not pursue growth at all costs.

The authorities went as far as endangering China's near-term economic health last month, allowing Chinese money markets to seize up to drive home a message to banks that credit would not always be easy.