Asian markets declined this week due to increasing concerns about China's economic slowdown and heightened Spanish banking sector woes.

Hong Kong's Hang Seng Index slumped 0.8 percent, for its fourth continuous weekly loss, as market sentiment was down due to investors' concerns about China's economic slowdown. Data released Friday by the China Federation of Logistics & Purchasing showed that the Purchasing Managers' Index (PMI) fell to 50.4 in May, down from 53.3 in April. The softening of manufacturing activities in May is a reflection of the deteriorating export situation in China, which calls for more aggressive policy easing. The Hang Seng closed at 18,558.34 Friday.

There were fears of a hard landing after data showed earlier last month that China's economy slowed down to 8.1 percent in the first quarter, down from 8.9 percent in the fourth quarter of 2011.

Another factor that dragged down Asian market sentiment was investors' fears that the euro zone debt crisis had spread to Spain. The market discounted the possibility of Spain using the European Central Bank's leverage to help its banks and its regions.

Japan's Nikkei Stock Average lost 1.6 percent in the week. Japan's industrial production gained in April from the previous month but remained below expectations, raising concern about the country's faltering economic growth momentum. The Nikkei closed at 8445.25 Friday.

The Shanghai Composite Index gained 1.7 percent amid hopes that China would announce stimulus measures to regain growth momentum, and it closed at 2,373.44 Friday.

India's BSE Sensex fell 1.56 percent for the week, which is the index's fifth weekly decline out of the last six weeks. Market sentiment was down following concerns about India's economy as the country's economic growth plunged to 5.3 percent in the fourth quarter ending March 31, which is a nine-year-low. The Sensex closed at 15965.16 on Friday.

The worrisome condition of Spain's banking sector added to the debt crisis looming over the euro zone, which dragged down the investor confidence. Ratings firm Egan-Jones downgraded Spain's credit rating to B from BB-. This follows the situation developing in the Spanish banking sector after Bankia, the country's fourth-largest bank, asked for a 19 billion euro ($23.8 billion) capital injection.

The data from the U.S. was also disappointing with ADP's reported employment change for the month lower than expected and initial jobless claims surprisingly moving higher. Non-farm payrolls showed that the U.S. economy added 69,000 jobs in May, which was much below the expected 150,000 jobs.

Major Losers: Shares of PetroChina Co. dropped 3.9 percent, and those of China Railway Construction declined 7.3 percent. Shares of Canon Inc. and HSBC fell 5.6 percent and 3 percent, respectively. Export-based companies doing business in Europe seriously suffered following soft demand in the euro zone.

Week Ahead: The markets are expected to continue with the downward trend as concerns about growth in China and the debt crisis in the euro zone are anticipated to persist. With the global economy facing a weak situation, the Asian markets may remain bearish in the next week.