Asia shares stumble as China PMIs fail to allay growth concerns

Asian shares slipped on Monday after separate surveys of Chinese factory activity failed to banish concerns about a slowdown in the world's second-largest economy.

Persistent fears about Greece's financial situation and downbeat US data also sapped investors' confidence.

The official manufacturing Purchasing Managers' Index (PMI) edged up to 50.2 from April's 50.1, matching the expectations of economists polled by Reuters, but also suggested Beijing might have to take additional steps to spur growth.

The final HSBC/Markit PMI was also released and showed a reading of 49.2 in May, shrinking for a third straight month and below the 50-point level that separates an expansion from a contraction in activity on a monthly basis. The private survey showed export orders contracted at the sharpest rate in nearly two years.

"A solid fall in new export work contributed to fewer new orders, which in turn led to the first contraction of output in 2015 so far," said Qu Hongbin, an economist at HSBC in Hong Kong.

A separate official survey of China's non-manufacturing PMI edged down to 53.2, compared to April's 53.4, showing that growth in the country's services industry cooled last month.

MSCI's broadest index of Asia-Pacific shares outside Japan extended early losses and was down about 0.9%, even as Chinese shares were higher in early trading. 

The CSI300 index of the largest listed companies in Shanghai and Shenzhen as well as the Shanghai Composite Index were both up 1%.

Japanese PMI, meanwhile, showed an improvement. The Markit/JMMA final Japan Manufacturing PMI rose to a seasonally adjusted 50.9 in May, unchanged from the preliminary reading but higher than a final 49.9 in April.

Japan's Nikkei stock index gave up 0.5%, as the yen's recent weakening trend took a breather.

On Wall Street on Friday, major US indexes posted monthly gains but daily losses after the University of Michigan's consumer sentiment marked a drop, while the Institute for Supply Management-Chicago Business Barometer unexpectedly fell.

The US government also revised its first-quarter gross domestic product estimate to show GDP contracted at a 0.7% annual rate instead of the 0.2% growth pace it estimated last month.

That was slightly better than economists' expectations for a drop of 0.8%, but still underscored the fact that the recovery stalled early this year, and the Federal Reserve policymakers might wait longer to raise US interest rates until they have more confidence in the economy's momentum.

The figures weighed on US Treasury yields, stalling the greenback's recent rally against the yen. It stood at 124.21 in early trading, nearly flat on the day and below its more than 12-year peak of 124.46 yen scaled last week.

Greece's woes weighed on the euro, which slipped about 0.5% to $1.0936. That helped an index tracking the dollar against a basket of currencies gain about 0.3% to 97.206.

Greece and its European creditors agreed on the need to reach a cash-for-reforms deal quickly as Athens missed a self-imposed Sunday deadline for reaching an agreement to unlock aid, sources close to the talks said.

In commodities trading, crude oil surged nearly 5% on Friday but started the week on a subdued note, as rising OPEC output and an expectation that the group would keep production high added to sentiment that the market remained over supplied despite ongoing falls in US rig operations.

U.S. crude futures fell about 0.8% to $59.80 per barrel, while Brent shed about 0.7% to $65.11.