HONG KONG, March 10 (Reuters) - Hong Kong stocks closed lower on Thursday, led by a bout of profit-taking in banks prompted by a weaker mainland market that also saw investors lock in gains as the central moved to drain cash from the financial system.
The Hang Seng Index <.HSI> finished down 0.82 percent at 23,614.89, while the China Enterprises Index <.HSCE> was down 0.74 percent. Tepid turnover on the Hong Kong stock exchange, down 7 percent from Wednesday, suggested that some market players preferred to stay on the sidelines ahead of Chinese inflation data on Friday.
The Shanghai Composite Index <.SSEC> ended down 1.5 percent as banking shares bore the brunt of profit-taking.
HIGHLIGHTS:
* China swung to a trade deficit in February of $7.3 billion, its largest in seven years, as the Lunar New Year holiday dealt an unexpectedly sharp blow to exports. It was China's first trade deficit since March last year although economists, who had forecast a small surplus of $4.95 billion, said the sudden drop was likely to prove temporary. [ID:nTOE72903F]
* Financials were weaker in Hong Kong and Shanghai after posting steady gains since the last week of February as investors, including long-only funds, bought ahead of expected strong earnings. The sector sub-index in Hong Kong <.HSNF> eased 0.9 percent led by HSBC Holdings Plc <0005.HK>, which was down 1.4 percent.
* Bucking the weaker trend, Hutchison Whampoa Ltd <0013.HK> rose 0.8 percent amid talk that the proposed Singapore listing of its port unit had seen strong interest. Rival port operator Cosco Pacific Ltd <1199.HK> rose 4.7 percent and was the top gainer on the Hang Seng Index on healthy volume. [ID:nL3E7EA0I2]
DAY AHEAD:
All eyes will be on China's inflation data for February, which is expected to show the rise in consumer prices slowing as the government reins in lending and clamps down on the economy.
China was confident it could hold inflation to an average of 4 percent this year, the government's statistics chief said on Thursday, but a central bank adviser warned that soaring commodity costs were adding to upside risks. [ID:nTOE72809E] (Reporting by Vikram Subhedar; Editing by Chris Lewis) (vikram.subhedar@thomsonreuters.com; +852 2843 6975; Reuters Messaging: vikram.subhedar.reuters.com@reuters.net))