CARLO PIOVANOLONDON (AP) â¿¿ Fears of an intensifying global economic slowdown pushed markets lower on Friday, when new surveys showed a contraction in the manufacturing sector in China, a bellwether for world demand as it produces and exports a huge amount of consumer goods. An index compiled by HSBC of manufacturing activity in the world's second-largest economy fell to 48.1 points in March from 49.6 in February. Figures below 50 indicate that manufacturing is shrinking. That data comes on top of trade figures showing both Chinese and global demand falling. "The market is disappointed that China's manufacturing sector is shrinking, so we are seeing the start of a major correction," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. The lack of bold reaction from China's government is causing investor unease, analysts said. The government has indicated it favors a pro-growth policy but so far has not aggressively reduced reserve requirements for banks on a national scale or lowered interest rates. "China hasn't done anything to inject confidence in the market," said Jackson Wong, vice-president at Tanrich Securities in Hong Kong. "That is dragging down the whole market in Hong Kong and other areas. So now we wait to see if China will roll out some bold moves." After losses across Asia, Germany's DAX was down 0.1 percent at 67975.81 while France's CAC-40 lost 0.3 percent to 3,463.14. Britain's FTSE 100 shed 0.1 percent to 5,841.43. The euro rose 0.3 percent to $1.3249 while bond yields for Spain, one of Europe's weakest economies, continued to rise to around 5.50 percent as worries resurfaced it might eventually need a bailout. Wall Street appeared headed for a slightly stronger, with Dow Jones industrial futures up 0.1 percent to 13,010 and S&P 500 futures also adding 0.1 percent, to 1,390.60. Later Friday, the U.S. government will release a report on the number of people who bought new homes in February. Federal Reserve Chairman Ben Bernanke will also be delivering brief opening remarks at a Fed conference on central banking in Washington.