China manufacturing shrinks in May

In China, market watchers are digesting the first contraction in factory activity since October. It's a worrying sign for those concerned that a recovery in China's economy, the world's second largest, may have stalled.

The flash HSBC Purchasing Managers' Index fell to 49.6 in May, slipping under the 50-point level separating expansion from contraction. Manufacturing activities in May reflected slower domestic demand and ongoing external headwinds.

Analysts say the flash PMI, which comes out a week before the final reading, will reinforce market expectations for only a modest economic recovery this year.