* Hang Seng falls 1.6 percent, Shanghai down 0.8 percent
* Japan's massive earthquake makes Nikkei futures slide
* Steel counters in HK rise on hopes for rebuilding work
* Wall Street weakness to keep investors wary
(Updates to close)
By Vikram S.Subhedar and Emma Ashburn
HONG KONG, March 11 (Reuters) - Hong Kong shares fell on Friday, pushing them to a small weekly decline, as Asian markets saw a selloff in the afternoon after a massive 8.9 magnitude earthquake jolted Japan.
The benchmark Hang Seng ended the day 1.6 percent lower but traders said the lack of a major spike in turnover suggested there was no rush to the exits. For the week, the Hang Seng fell 0.7 percent.
Shanghai's key stock index slipped 0.8 percent as investors, wary of tighter liquidity in the financial system, continued to book profits in banking and energy plays.
The Shanghai Composite fell 0.3 percent for the week. The MSCI Asia ex-Japan slide 1.4 percent on Friday and 2.9 percent for the week.
While Asian markets remained wobbly on weak economic data and political unrest in Saudi Arabia, Chinese stocks have remained relatively resilient, supported by steady gains in the heavyweight financial sector on valuation.
Nikkei futures slid nearly 5 percent after Japan's earthquake, which will weigh on the region, but there was little to suggest that China investors were dumping shares.
"The timing is a coincidence, as the drop probably wasn't earthquake-related because we didn't see trading volumes increase in the afternoon as the market fell," said Xu Yinhui, an analyst at Shanghai Securities.
A Wall Street slump overnight which saw major U.S. indexes fall below key technical levels put the Hong Kong market under pressure all day with large caps leading the fall.
CNOOC Ltd , which dipped 1.3 percent on Thursday, dropped another 2.3 percent on Friday. HSBC Holdings Plc fell 1 percent.
"You can't have a one-way street in stock markets, but the fundamentals remain strong," said Louis Capital Markets director Tom Kaan in Hong Kong, adding that smart money was still finding value and coming in to buy on dips.
Earlier in the day, China released inflation data for February that showed consumer price rises leveling off but industrial output accelerating, an early sign that the government is succeeding in taming price pressures without unduly harming growth in the world's second-largest economy.
Bucking the broader weaker trend, steel companies rose in Hong Kong late in the day as buyers snapped up beaten down shares on optimism that rebuilding work in Japan would lift profits.
A head trader at an Asian bank in Hong Kong said steel stocks climbed as investors expected steel companies to get pricing for their products as demand from Japan jumps.
Maanshan Steel rose 3 percent while rival Angang Steel increased 1.6 percent.
(Editing by Richard Borsuk)
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