* HSI down 0.4 pct, H-shares off 0.5 percent
* CSI300, Shanghai Comp up 0.2 percent
* Energy, China banks see profit-taking after outperformance
* Railway stocks on mainland rally on investment 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, leaving the local benchmark poised for its worst weekly performance since mid-July.
The Hang Seng index fell 0.4 percent to 21,472.7 by the midday trading break. The China Enterprises index was down 0.5 percent, with recent outperformers such as banking and energy shares the biggest drags.
Both indices are down about 3 percent for the week.
On the mainland, the CSI300 of top Shanghai and Shenzhen listings and the Shanghai Composite both edged up 0.2 percent, paring earlier losses on the back of strength in railway stocks.
China's annual consumer inflation eased to its slowest pace in nearly three years in October, 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 U.S. were affecting markets, there were few signs of any major selling pressure.
China Construction Bank and oil major Petrochina contributed the most to weakness on the China Enterprises index with losses of 0.7 percent and 1 percent respectively.
China Shenhua fell 1.4 percent.
Encouraged by signs of stabilizing 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.
Bucking the weaker trend, Lenovo Group added 4 percent and neared a three-month high following second-quarter results. Telecom hardware maker ZTE rose 2.1 percent.
RAILWAYS JUMP IN CHINA, BANKS WEAK
Hopes of more spending on rail infrastructure drove up shares of rail equipment makers in Shanghai.
CSR Corp was up 4.2 percent and was the main gainer on the CSI300 index. China Railway Group rose 3.3 percent and China Railway Construction was up 3 percent.
According to Haitong Securities, China's Ministry of Railways is estimated to spend upto 160 billion yuan ($25.63 billion) in the last two months of 2012 on infrastructure spending.
Banking shares were on the backfoot on mainland bourses, with Bank of China down 0.7 percent and Agricultural Bank of China off 0.4 percent.