September factory activity in some of Asia's biggest economies slumped to levels last seen during the depths of the financial crisis as export demand dropped, reinforcing fears that fading U.S. and European growth will spare no one.

Similar figures for Europe and the United States later on Monday are expected to underscore the gloomy outlook for the global economy.

A gauge of India's manufacturing output recorded its biggest monthly decline since November 2008 while Taiwan's factory activity slowed to a 32-month low, purchasing managers' indexes released on Monday showed.

Even in China, which reported a slight uptick in its official PMI on Saturday, economists saw evidence of a cool-down. China's factory activity typically rises in September as businesses prepare for the Golden Week holiday, but this year's increase was smaller than the average.

The HSBC Markit India Manufacturing PMI fell to 50.4 in September from 52.6 a month earlier, perilously close to the 50 mark dividing growth from contraction.

India's factory sector has gone from robust growth to near stall speed in just five months. A fall in the new orders index for the sixth straight month suggested more weakness ahead.

Taiwan's PMI dropped to 44.5, its fourth consecutive month below the 50 line. New orders contracted for a third straight month, with both domestic and overseas demand weakening in a sector that is closely watched because many of the island's tech firms make up integral parts of global supply chains.

New orders from Europe were particularly mentioned as having declined, HSBC said in a statement.

Asia's stock markets tumbled on Monday, with Hong Kong shares taking a particularly hard beating. Analysts said foreign fund managers sold to boost cash, expecting a surge in clients' redemption requests. Worries about slowing Asian growth also weighed on sentiment.

Asia's export orders have been falling steadily since mid-summer as Europe's debt crisis intensified and the U.S. economy slowed. So far, the data points to a moderate slowdown in China and other Asian economies, but another U.S. or European recession would change the equation.

A recession in the global economy could cause a China hard landing, Barclays Capital economists wrote in a note to clients, adding that this was not their baseline forecast.

Nomura economist Zhiwei Zhang said a new export orders reading of 50.9 in China's official PMI was well off the historical September average level of 55.7, excluding an unusually weak print from September 2008 when Lehman Brothers collapsed.

Europe's survey due later on Monday is likely to confirm factory activity contracted, while the U.S. index is expected to hover just above 50, a Reuters poll of economists showed.

In Japan, a similar report on Friday showed the manufacturing sector contracted in September for the first time in five months, suggesting that its economy was back in the doldrums after a short-lived earthquake-recovery boost.

Japanese business sentiment recovered somewhat in the third quarter, but a strong yen and Europe's debt crisis left companies cautious about the outlook, the Bank of Japan's quarterly tankan survey showed on Monday.

If there is a silver lining for Asia, it is that slowing growth has helped to cool inflation, which remains well above target in countries including China and India. Input prices in those two countries rose at a slightly slower pace in September, the PMI surveys showed.

That takes some pressure off the People's Bank of China and Reserve Bank of India to keep ratcheting up interest rates.

While the persistent inflation pressures support RBI's tightening bias, the slowdown in manufacturing growth suggests that the end to the tightening cycle is at least now in sight, HSBC economist Leif Eskesen said.

(Reporting by Yati Himatsingka in Bangalore, Leika Kihara and Tetsushi Kajimoto in Tokyo; Editing by Neil Fullick)

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