* HSI -0.1 pct, H-shares -0.5 pct, CSI300 -0.6 pct
* HK has best week since January but in dismal turnover
* A-shares post third weekly loss in anemic volume
* Lenovo hit by Citi downgrade, China PC sales seen slowing
By Clement Tan
HONG KONG, April 12 (Reuters) - Hong Kong shares outperformed China this week but both markets ended on a sombre note on Friday with cyclical sectors broadly weaker ahead of data next week that could offer more clues to the recovery in the world's second-largest economy.
Investors drew mixed signals from China data this week, with March inflation weaker than expected while an unexpected trade deficit and a surge in liquidity in the mainland raised concern about the risks to the financial system.
The Shanghai Composite Index and CSI300 of the top Shanghai and Shenzhen A-share listings was each down 0.6 percent on the day. They posted their third-straight weekly loss, losing 0.9 and 0.8 percent, respectively.
The Hang Seng Index slipped 0.1 percent, while the China Enterprises Index of the leading Chinese listings in Hong Kong shed 0.5 percent. They rose 1.7 and 2.2 percent this week, their respective best weekly showing since January.
Even then, gains in Hong Kong lacked conviction, coming in the weakest weekly turnover in eight. Citing fund flow tracker EPFR data, Citi strategists said that outflows in the week that ended April 10 from Asia equities came mainly from China exchange-trade funds (ETFs), totalling $570 million.
Excluding last week when mainland markets only traded three days, Shanghai bourse volume this week was the worst since the start of the year as the Chinese central bank drained 17 billion yuan ($2.74 billion) from onshore markets this week.
That stoked concerns that credit has to be soon tightened, particularly after China's total social financing, the central bank's broad measure of liquidity in the economy, more than doubled in March from February.
Beijing is next expected to report first quarter GDP and March industrial output, retail sales and urban investment data on Monday.
"There's hardly been any fresh inflows into equities and I think fund managers will still look to further reduce their holdings in equities from very high levels early this year," said Zhang Qi, a Shanghai-based analyst with Haitong Securities.
"If their aim is to keep risks manageable, it would certainly seem like the PBOC (People's Bank of China) may have to rein in more liquidity after the spike in money supply and total social financing last month," Zhang added.
The growth-sensitive basic material sectors were weaker. Trina Chen, Credit Suisse's sector analyst, said in a note that Beijing's 2013 closure targets for obsolete capacity in 19 industries, released on Thursday, are likely behind market expectations.
Aggravating concerns that excess capacity issues may linger for these industries, the official People's Daily reported on Thursday that inventories of major steel products in 22 large cities in China hit a record high of 15.6 million tons at the end of March, citing the China Iron and Steel Association.
Angang Steel fell 2.1 percent in Hong Kong and 1.5 percent in Shenzhen. Chinese coal producers were broadly weaker, with China Shenhua Energy down 0.9 percent in Hong Kong and 0.3 percent in Shanghai.
Lenovo Group followed Thursday's 5.8 percent plunge with a 6.1 percent dive that took its Hong Kong shares to their lowest since November. Citi downgraded Lenovo by two notches, from "buy" to "sell", believing its China personal computer business will start to slow.
This comes after International Data Corp said on April 10 that PC sales plunged 14 percent in the first quarter, the biggest decline in its two decades of keeping records.