China's factory sector shrank the most in 32 months, reviving worries the economy could be skidding towards a hard landing. A sharp fall in new orders led to the slump, unnerving financial markets already alarmed by the euro zone debt crisis, and the latest downgrade in U.S. GDP growth. 　　Commodity currencies like the Australian dollar extended losses, on concern that demand from Australia's biggest trading partner and export market will ease. Stocks in Sydney, Seoul and Taiwan lost further ground, and U.S. stock futures fell, with the data reviving global recession fears. 　　HSBC says the PMI data suggests industrial output growth in China in the coming months will slide to around 11 percent. Output has averaged close to 14 percent this year. But factory inflation cooled sharply, with sub-indexes for input and output prices dropping below 50, to lows last seen in April 2009. 　　Input prices are a key forward indicator of where consumer prices are headed. The soft factory data and easing inflation, are likely to boost expectations Beijing may soon shift its policy focus from selective support, to broader measures, like a nationwide cut in bank reserve requirements or fiscal stimulus. (Arnold Gay/Reuters)