* HSI down 0.9 pct, falls 3.3 percent on week
* China banks, energy shares hit by profit-taking after rally
* CSI300 down 2.9 percent, Shanghai Comp down 2.3 pct on week
* Railway stocks up again in China on investment spending hopes
By Vikram Subhedar
Nov 9, (Reuters) - Hong Kong shares eased further from their 2012 highs as weak overseas markets spurred more profit-taking, particularly in China-focused shares, dragging the benchmark to its worst weekly performance since mid-July.
The Hang Seng Index fell 0.9 percent to 21,384.4, its worst week in four months, while the China Enterprises Index was down 0.7 percent, with recent outperformers such as banking and energy shares the biggest drags.
Both indices fell more than 3 percent for the week.
On the mainland, the CSI300 of top Shanghai and Shenzhen listings and the Shanghai Composite both edged down slightly, but pared earlier losses on the back of strength in railway stocks.
On the week, the two indices were down 2.9 percent and 2.3 percent, respectively.
China's annual consumer inflation in October eased to its slowest pace in nearly three years, official data showed on Friday, giving policymakers room to further loosen monetary policy to support growth if needed. Stock markets were little changed following the data.
"It's one of these situations where capital flows are driving prices and there's a lot of rotation going on," said Chrisian Keilland, head of trading at BTIG in Hong Kong.
"You see people unloading winners and looking into ideas that have been ignored for a while," said Keilland, adding that while losses on the S&P 500 in the United States were affecting markets, there were few signs of any major selling pressure.
China Construction Bank and oil major Sinopec contributed the most to weakness on the China Enterprises Index with losses of 1 percent and 1.6 percent, respectively.
PetroChina fell 1 percent.
Encouraged by signs of stabilising growth in China, investors have flocked to growth-sensitive sectors and banking shares that had lagged the broader market over the first three quarters of the year.
But a 3.5 percent drop over the past two days for the S&P 500 which could be headed for its worst weekly performance in a year and renewed euro-zone growth worries has prompted some investors to lock in sectors that drove last month's rally.
Bucking the weaker trend on the day, Lenovo Group added 5.8 percent following second-quarter results to close at its highest since June 20 this year. Telecom hardware maker ZTE rose 1.9 percent.
Warren Buffet-backed BYD Co rose 7.6 percent.
RAILWAYS JUMP IN CHINA
Hopes of more spending on rail infrastructure drove up shares of rail equipment makers in Shanghai.
CSR Corp was up 4.2 percent and among the top gainers on the CSI300 index. China Railway Group rose 3.3 percent and China Railway Construction was up 3.5 percent.
According to Haitong Securities, China's Ministry of Railways is estimated to spend up to 160 billion yuan ($25.63 billion) in the last two months of 2012 on infrastructure spending.
Oil companies were weak on mainland bourses too, with PetroChina off 0.3 percent and the top drag on the CSI300.