* HSI down 0.3 pct, CSI300 down 1.2 pct
* Indices dragged by financials, real estate
* Mainland investors wary of clampdown on real estate prices - analyst
* Small- and medium-caps in focus as blue chips underperform
By Donny Kwok and Chen Yixin
HONG KONG/SHANGHAI, Feb 19 (Reuters) - Stock markets in Hong Kong and mainland China declined for the second straight day on Tuesday, led downward by real estate and financials, as investors grew concerned that rising property prices would lead to fresh restrictions on the sector.
"Participants are unloading their shares ahead of the upcoming corporate earnings in particular in a directionless market," said Alfred Chan, chief dealer at Cheer Pearl Investment.
The blue chip Hang Seng Index was down 0.27 percent at 23,319.94 by the lunch break. The China Enterprises Index of the top Chinese listings in Hong Kong shed 0.8 percent at 11,644.26.
On the mainland, the CSI300 Index, which tracks the largest tickers in Shanghai and Shenzhen, was down 1.2 percent while the Shanghai Composite Index slid 1.0 percent.
Analysts also noted that sentiment was dampened in Chinese share markets after the People's Bank of China drained funds in open market operations for the first time in more than seven months.
"Property shares are down because of concerns that China might tighten property policy, including expanding the property tax pilot programme," said Zhang Yanbin, analyst at Zheshang Securities in Shanghai.
Reports in Chinese media have cited surveys by unofficial institutions claiming that property sales in major Chinese cities continued to recover in 2013.
Reuters analysis of data produced by the National Bureau of Statistics showed that average home prices rose for a fifth consecutive month in December while real estate investment increased 16.2 percent year-on-year, prompting fears of the return of destabilising consumer price inflation.
China Vanke, China's largest property developer by sales, slid as much as 4.3 percent in Shenzhen. In Hong Kong, China Resources Land lost 4 percent, while China Overseas Land fell 1.3 percent.
Other notable declines included Galaxy Entertainment Group Ltd, which fell 5.2 percent, and Sands China Ltd which lost 4.4 percent. Stocks of China Life Insurance Co Ltd were down 2.4 percent, their lowest since Dec. 21.
Analysts believe Chinese markets are entering an adjustment phase in the aftermath of a meteoric rally in December and January.
Wang Aochao, read of research at UOB Kay Hian in Shanghai, attributed much of the force behind the rally in Asian markets - in particular in Hong Kong - to monetary easing in the United States, which he said is likely to wind down in 2013.
"Also, there are no clear signs to persuade me to believe that Chinese economic recovery is sustainable. Given these two points, I don't think the market is set to resume rising."
Analysts said tepid mainland sentiment is affecting investors in Hong Kong, who were disappointed when exchanges in Shanghai and Shenzhen failed to rally again when mainland markets reopened on Monday after a week-long holiday.
"The market may go into short-term consolidation, waiting for more news," said Linus Yip, strategist at First Shanghai Securities in Hong Kong, adding that market fundamentals are still strong as global fund managers continue to go into stock markets.
"The index is locked in a range and traders may turn their eyes to some mid- and small-cap stocks," Yip said.