(Corrects dateline)
* Euro worries overshadow better than expected China data
* Gold, treasury in demand as safe haven
* Portugal rating warning weighs
By Sanjeev Miglani
SINGAPORE, Dec 1 (Reuters) - The euro slipped further on Wednesday and stocks in Asia were struggling, despite stronger-than-expected manufacturing data from China, as fears of a wider euro zone debt crisis grew.
Investors turned to the safety of gold, which hit a record in euro terms in early trade, and to U.S. government bonds after Standard & Poor's put Portugal's credit rating on review for a possible downgrade, saying the country may have to turn to the EU and IMF for funding.
Although Lisbon, much like Ireland earlier, denies Portugal needs aid, markets are already discounting an eventual Portuguese emergency financial rescue.
While rescuing Portugal would be manageable, assistance for Spain would sorely test the European Union's resources, raising deeper questions about the integrity of its 12-year-old currency and possible contagion beyond Europe.
The euro fell to around $1.2969 in early Asia trade, lows not seen since mid-September, and experts said it could fall further unless there was strong action.
"You really need some aggressive action from the authorities in Europe to try and calm nerves and that's really the key at this stage," Greg Gibbs, a strategist at RBS in Sydney, said.
The euro has fallen some 9 percent from a November high around $1.4281 and was down about 7 percent in November, the biggest monthly fall since May.
CHINA DATA
Stock markets have tracked the euro zone's rolling debt crisis closely, and on Wednesday the MSCI index of shares outside of Japan drifted 0.16 percent lower, despite data from China that showed it had revved up production in November more than expected, with the official purchasing managers' index (PMI) rising to a seven-month high.
Shanghai stocks were down 0.2 percent in early trade and Japan's Nikkei's share average also inched lower, brought down by constant concern over Europe's debt problems. The Nikkei fell nearly 2 percent the previous day, pulled down by tumbling China stocks following a liquidity squeeze in the share market. On Wednesday, it was 0.2 percent lower.
"Investors were worried over interest hikes in China and
the
euro zone yesterday and are now waiting for this Friday's U.S.
employment figures and Christmas sales figures to trade on,"
said Fumiyuki Takahashi, equity strategist for Barclays
Capital Japan.
Oil
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