* HK market firms 0.2 pct, energy supports
* China shares 0.2 pct, earnings buoy banks (Updates to midday)
By Emma Ashburn and Clement Tan
SHANGHAI/HONG KONG, April 1 (Reuters) - Hong Kong shares were slightly higher on Friday after falling back from early gains ahead of the weekend and a public holiday on Tuesday, with investors cautious at the start of the second quarter amid multiple lingering risks.
China's official March purchasing managers' Index (PMI) data, released early Friday morning, showed the country's manufacturing sector grew for a 25th straight month, while factory inflation eased [ID:nL3E7F104Q], but that failed to register on the benchmark Hang Seng Index , analysts said.
"This is a good start," said Peter Lai, director at DBS Vickers in Hong Kong. "But with so many risk factors overhanging right now, we are going to need more than just one sign."
Hong Kong's main stock index was up 0.16 percent at 23,565.84 by the midday trading break, extending two straight sessions of gains. The index finished the first quarter up 2.1 percent on Thursday, outperforming the Nikkei but underperforming the Shanghai Composite Index .
China's March PMI figures provided broader buying impetus in the Chinese markets, analysts said. The Shanghai Composite Index was up 0.2 percent at 2,935.3, rebounding after three straight sessions of losses. Banks did well on the back of a solid earnings season.
"Banks are doing well today ... because their price-to-earnings ratio is relatively low," said Cheng Yi, an analyst at Xiangcai Securities. "Recent rate rise expectations ... are (also) good news for banks because it will increase the spread they can earn on interest income."
Gains among energy counters weighed in Hong Kong, led by CNOOC Ltd .
"Some funds look to have been buying sectors recommended by the Chinese central government in the last two weeks," said DBS Vickers' Lai. "Such as energy, especially alternative energy stocks, but excluding nuclear after Japan."
Traditional energy counters such as oil and coal were also favoured by investors. A survey conducted last week by Credit Suisse at its Asian Investment Conference showed its 2,000 participants broadly favouring China and energy counters.
Higher oil prices are expected to support this bullish position, but other fund managers were more cautious, warning that slowing Chinese growth would reduce demand.
"High oil prices now are more the result of the crisis in the Middle East and less due to fundamental demand," said Benjamin Chang, chief executive officer of LBN Advisers Ltd. "The execution of individual companies also matters, even in favoured sectors." (Editing by Chris Lewis)
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