By Nigel Davies

A survey on China also reported that the pace of deterioration in business conditions had eased, providing tentative evidence that factories in these two regions may be pulling out of their deep dive.

Still, South Korea reported a record fall in exports and a slump in sales pushed more Japanese electronics firms into the red highlighted the urgency for more action to contain the global downturn.

In the United States, President Barack Obama will try later on Monday to overcome opposition from Republican lawmakers to parts of his plan to revive the rapidly shrinking U.S. economy by spending nearly $900 billion.

Markets see the plan as a key part of efforts to limit the damage from the crisis sparked by a U.S. housing slump that wiped out nearly $14 trillion in global stock market value last year, pushed several major economies into recession and put millions of jobs on the line.

In Europe, a survey of about 3,000 manufacturers showed only Germany among the euro zone's leading four economies had registered a deepening contraction in January.

France, Italy, and Spain all saw some slowing in the pace of decline.

The Markit Eurozone Manufacturing purchasing managers' index (PMI) for January rose to 34.4 from 33.9 in December, the eighth month in a row the index has been below 50.0, which separates growth from contraction.

The PMI also showed companies' costs falling at their fastest pace in the near 12-year survey history, suggesting more leeway for the European Central Bank to cut rates by March as is widely expected.

A purchasing managers' index on China, produced for brokerage CLSA, rose to 42.2 in January from 41.2 in December, indicating conditions are deteriorating overall but at a slower pace.

China's Premier Wen Jiabao also pointed to signs of recovery.

"During the last 10 days of December it started to get better," Wen told a business audience in London. "The goods piled up in port started to decrease and the price of industrial products started to rise."

Still, Wen told the Financial Times that the authorities may provide "new, timely and decisive measures" to support the economy, having already pledged to spend 4 trillion yuan ($585 billion) over the next two years.

Figures from South Korea were more sobering. The home to some of Asia's top manufacturers and exporters reported a record 32.8 percent drop in exports in January from a year earlier.

"The fall was really shocking," said Jun Min-Kyoo, economist at Korea Investment & Securities.

"The collapse in exports would bring about negative growth this year," he said, adding that the central bank should cut rates by at least another half a point at its February 12 meeting.

The data raised the specter of South Korea sliding into its first recession in more than a decade and highlighted the collapse in demand for the region's best-sellers: cars, consumer electronics and ships.

India also showed more signs of the impact of the global crisis. Manufacturing activity contracted for the second month in a row in December, when exports also fell from a year earlier for the third straight month.

Indonesia's exports in December fell by a fifth from a year earlier, the fastest rate in seven years.

LOSSES, LOSSES

There was little to cheer investors in the world's second-largest economy either.

Japanese markets, already facing the country's longest-ever recession and a return of deflation, have been repeatedly jolted by news of losses suffered by manufacturing bellwethers such as Sony or Toyota Motor Co.

Panasonic shares fell 3.1 percent on Monday after a newspaper report, later confirmed by a source, said the world's biggest plasma TV maker would book a $3.9 billion annual net loss -- its first in six years.

Rival electronics maker Hitachi plunged 17 percent after it warned it would lose $7.8 billion due to sinking sales, suffering the biggest-ever full-year loss at a Japanese manufacturer.

In Australia, news of a drop in house values and a survey marking the eighth consecutive month of manufacturing contraction set the stage for another hefty 1 percentage point interest rate cut on Tuesday and a new economic stimulus plan.

Government data showed on Monday house prices fell 3.3 percent in the fourth quarter from a year earlier, eroding consumers' wealth and cementing expectations that the central bank will slash rates to a record low of 3.25 percent.

Prime Minister Kevin Rudd said on Monday that the global downturn and efforts to keep the $820 billion economy growing would push the budget into deficit and cost $73 billion in lost revenue over the next four years.

Market attention will shift later on Monday to Washington, where Obama will try to overcome Republicans' opposition to his spending plan by appealing to their sense of urgency.

"The thing I want all of them to remember, and the thing I am thinking of every single day, is the thousands of people being laid off from their jobs right now," Obama told NBC television.

(Reporting by Reuters bureaus worldwide; Writing by Paul Tait; Editing by Neil Fullick)