(Updates to close)
* HSI down 1.1 pct, Shanghai Comp slips 1.4 pct
* Sun Hung Kai falls after arrest of senior executive
* HK & China Gas up after earnings beat expectations
By Clement Tan
HONG KONG, March 20 (Reuters) - Hong Kong shares fell for a third-straight session on Tuesday and stocks in Shanghai also slid as investors took money off the table with the ongoing corporate earnings season failing to meet expectations.
Sun Hung Kai Properties lost 2.4 percent and was among the top drags on the Hang Seng Index after one of its senior executive was arrested by Hong Kong's anti-graft body over suspected bribery.
The Hang Seng fell 1.1 percent to 20,888.2 points, while the China Enterprises Index of the top mainland listings in Hong Kong shed 1.5 percent.
The Shanghai Composite Index lost 1.4 percent to end at 2,376.8, with turnover near a two-week low.
"There are no fresh positive catalysts. We are in a downward spiral today. I'm just trying to cut my losses," said Alex Wong, Ample Finance's director of asset management.
The Hang Seng Index is down 3.7 percent this month after surging 17.6 percent in the first two months of the year as investors chased a rally led by growth-sensitive stocks which slumped last year.
The rally has stalled in March as fundamentals come back into focus with the start of the earnings reporting season.
According to Thomson Reuters StarMine, of the 43 percent of Chinese companies that have reported 2011 earnings so far, nearly 70 percent have missed forecasts, with resources and materials names producing the biggest disappointments.
China's Ministry of Finance said on Tuesday that profits at state-owned non-financial enterprises fell 10.9 percent in the first two months of 2012 from the same period a year earlier, the first decline since November 2009.
The Shanghai materials and industrial sub-indices were among the bigger underperformers of the session, each down 1.4 percent. Sany Heavy Industry Co Ltd , which is expected to post 2011 earnings on March 26, slipped 2 percent.
Belle International, a China-focused footwear retailer, slipped 0.7 percent ahead of its earnings report later on Tuesday. It has lost 6.5 percent since hitting a 3-1/2 month high last Thursday.
Chinese financials were broadly weaker in Hong Kong and Shanghai ahead of earnings later this week.
Agricultural Bank of China (AgBank) , which will report on Thursday, first among the so-called "Big Four" Chinese banks, lost 1.7 percent in Hong Kong and 1.1 percent in Shanghai.
Traders said sentiment was also dampened in the sector after Citibank on Monday sold a $743 million stake in Shanghai Pudong Development Bank at a 10 percent discount to Monday's closing price.
Shanghai Pudong Bank fell 1.7 percent.
Hong Kong & China Gas Co Ltd bucked the weaker trend, gaining 2.2 percent in more than double its 30-day average volume after posting a forecast-beating 10 percent increase in 2011 net profit from a year ago. It also announced a special dividend. (Additional reporting by Vikram Subhedar; Editing by Kim Coghill)