(Updates to close)
* HSI slips 0.3 pct, loses 1.3 pct this week
* Shanghai Comp down 0.4 pct, loses 0.4 pct this week
* BOC weak after earnings blow
* PetroChina climbs after earnings, Air China jumps on Citi upgrade
* Foxconn hammered after profit warning
By Clement Tan
HONG KONG, April 27 (Reuters) - Hong Kong and China shares closed out their worst week in April on a whimper on Friday, snapping three-week winning streaks, with the financial sector a chief drag after Bank of China posted sub-par quarterly earnings late on Thursday.
Its Chinese banking peers among the "Big Four" were also broadly softer ahead of their quarterly earnings. Industrial and Commercial Bank of China (ICBC) sank 0.8 percent in Hong Kong and 0.5 percent in Shanghai.
The Hang Seng Index reversed midday gains to end down 0.3 percent, triggered by a dismal European opening on S&P's Spain downgrade that compounded its weekly losses. This week, the benchmark lost 1.3 percent.
In the mainland, the Shanghai Composite Index and the broader CSI300 Index that also tracks some Shenzhen listings, lost 0.4 and 0.2 percent, respectively. This week, they slipped 0.4 and 0.03 percent.
Turnover on the Shanghai bourse sank to its lowest in seven sessions ahead of a four-day public holiday in the mainland, while in Hong Kong, rose to the highest since April 18 to almost equal its 20-day moving average.
Hong Kong markets are also shut next Tuesday, with mainland Chinese markets only resuming trade on Wednesday.
A majority of Chinese companies, reporting quarterly earnings this week, have missed expectations and trends within sectors have been spotty as China's economy slows. Fund managers say stock picking could prove tough.
"Even if you are bullish about China, you probably shouldn't just go with cyclicals anymore. With the economy moving into a transition phase, you are likely to pick China winners if you play the structural story," said Tan Eng Teck, a Singapore-based investment manager at Treasury Asia Asset Management.
The Hang Seng is up 0.9 percent this month after a 5.2 percent slump in March. It is up 12.5 percent so far this year, while the Shanghai benchmark is up 9 percent. Shanghai rose 5.9 percent in April after sliding 6.8 percent last month.
Bank of China Ltd slipped 1.5 percent in Hong Kong in almost double its 30-day average volume. It reported a near 10 percent rise in January-March net profit, but the figure fell below expectations as flat net interest margins offset a rise in fee income.
The "Big Four" Chinese banks are seen as a barometer of the world's second-largest economy, but their sheer size after a huge growth spurt over the last decade is now seen as an impediment as Beijing seeks to rebalance the country's economy.
Investors are watching China's official April PMI, expected on May 1, for signs that the slowdown in the country has bottomed out. Analysts that Reuters polled suggest a further improvement to 53.6 in April from an 11-month high of 53.1 in March.
Also weak was Foxconn International Holdings Ltd, which dived 16 percent to close at its lowest since Oct. 4 last year. The world's biggest contract maker of cell phones warned that weaker demand from some key customers would widen its first-half loss.
The company, which also assembles handsets for the likes of Nokia and Motorola Mobility Holdings Inc, has been grappling with rising costs and falling prices in the cut-throat market.
EARNINGS REACTION NOT ALL BAD
Bucking overall weakness, PetroChina produced its best performance since Jan. 17, jumping 3 percent in more than double its 30-day average volume in Hong Kong after the oil giant posted a quarterly profit that trumped estimates late on Thursday.
PetroChina is up 20 percent this year and is currently trading at a 6 percent premium to its historical median 12-month forward earnings multiple. It has the best long-term growth prospects among the three Chinese oil majors, according to Thomson Reuters StarMine.
By contrast, China Petroleum & Chemical Corp (Sinopec) is trading at a 17 percent discount and CNOOC Ltd a 22 percent discount to their respective historic medians.
Air China Ltd advanced 5.9 percent in Hong Kong and 1.6 percent in Shanghai. Citi analysts upgraded its Hong Kong listing from "sell" to "buy" on Friday, suggesting the worst may be over for the airline after it posted an 85.7 percent plunge in quarterly profit on Thursday.
The airline also announced on Friday that it would issue 1.05 billion yuan ($166.56 million) worth of new A shares to its controlling shareholder, raising money to reduce bank borrowings and for working capital.
In a contrasting tale of two listing debuts, Haitong Securities Co Ltd, China's second-biggest broker by assets, was little changed in Hong Kong on Friday.
But China's People.cn Co Ltd leapt 74 percent in Shanghai, as investors flocked to the state-backed news portal, giving it a bigger market capitalisation than New York Times Co . (Additional reporting by Vikram Subhedar; Editing by Jacqueline Wong)