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* Spot iron ore headed for biggest weekly gain since Nov
* Upbeat sentiment after firm Chinese data this week
By Manolo Serapio Jr
MANILA, March 17 (Reuters) - Chinese steel and iron ore futures dropped on Friday after recent sharp gains that helped both commodities post their biggest weekly increase in two months.
Shanghai rebar scaled a three-year high this week on hopes of stronger infrastructure spending and property sales in top steel consumer China, lifting spot prices of raw material iron ore back above $90 a tonne for the first time in one-and-a-half weeks.
The most-active rebar on the Shanghai Futures Exchange closed down 1.3 percent at 3,575 yuan ($518) a tonne. But the construction steel product still rose 5 percent for the week, having touched 3,692 yuan on Wednesday, its strongest since February 2014.
Iron ore on the Dalian Commodity Exchange dropped 0.8 percent to end at 715.50 yuan per tonne. It touched a three-week peak of 735 yuan in the previous session, and posted a weekly gain of 8.8 percent.
The weekly gains in both rebar and iron ore were at their biggest since mid-January.
The wild swings in futures, which help sway spot prices, are putting investors on edge even as fundamentals are largely supportive, traders said.
"The market's become very risky," said a trader in Beijing.
But ANZ analysts said optimism on the outlook for iron ore demand "continued to pick up following the recent release of better-than-expected economic data in China."
China's fixed-asset investment grew 8.9 percent in January and February from the same period last year, largely due to strong property and infrastructure construction, outpacing the 8.1 percent pace for all of 2016.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose 1.8 percent to $92.61 a tonne on Thursday, according to Metal Bulletin. The spot benchmark has climbed 6.8 percent so far this week, on track for its largest such gain since late November.
$1 = 6.9031 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Sherry Jacob-Phillips