* HSI +0.5 pct, H-shares +0.7 pct, CSI300 +0.5 pct
* HK indexes post 2nd best weekly gain in 2013, but turnover weak
* Chalco jumps in short squeeze ahead of HSCE rebalancing
* CR Power sinks on merger news as trading resumes
By Clement Tan
HONG KONG, May 10 (Reuters) - Hong Kong shares finished their best week since the start of the year at a near three-month high on Friday, led by cyclicals as investors stretched a rebound from April lows despite patchy Chinese economic data.
Chinese banks were among the top index boosts, offsetting the impact of profit-taking on recently outperforming commodities-related counters.
The Chinese central bank reiterated late on Thursday their focus on inflation despite the country's patchy economic recovery, with more economic data due in the coming days.
The Hang Seng Index rose 0.5 percent on the day and 2.8 percent on the week to 23,321.2 points, its highest closing level since mid February. The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.7 percent on Friday and 4.6 percent this week.
Gains this week were their best since the week that ended Jan. 4 and their third consecutive, but came in weak turnover on the week that has lingered around its 52-week average for more than a month.
Still, Hong Kong indexes outperformed their onshore Chinese peers on the week. The Shanghai Composite Index and CSI300 each climbed 1.9 percent for their second-straight weekly gain. They gained 0.6 and 0.5 percent on Friday, respectively.
"It's highly unlikely we will see a rate cut from the Chinese central bank after the statement last night, so there's little catalyst for a meaningful rally from here," said Hong Hao, chief strategist at Bank of Communication International.
"It's still not a good environment to take too much risk at this point, I won't be surprised if a selloff happens at some point in May," he added.
On Friday, China Resources Power dived 10 percent to HK$22.85 in its worst single-day loss since June 2008 as its shares traded for the first time this week after being suspended on Monday.
The company announced it will merge with China Resources Gas , whose shares fell 3.9 percent to HK$21, offering 97 new China Resources Power shares for every 100 China Resources Gas shares held, in a non-cash deal.
Investors punished CR Power's offer, which represents a value of HK$24.64 per China Resources Gas' share, or a premium of 12.8 percent over its last closing price last week.
CR Power also said on Friday it would buy wind farms in 10 provinces in China from its controlling shareholder, sate-owned conglomerate China Resources (Holdings) Co Ltd, for HK$4.3 billion ($553 million).
CHALCO LEADS BETA GAINS
Aluminum Corporation of China (Chalco) jumped 5.9 percent in Hong Kong as investors rushed to cover short bets ahead of the release of the quarterly review of the Hang Seng family of indexes after markets close for the week.
Chalco, which was excluded from the Hang Seng Index at the previous review, has been speculated as a possible exclusion from the China Enterprises Index at this review. Its Shanghai listing climbed 1.7 percent.
Gains on Friday helped Chalco jump 12.9 percent in Hong Kong this week, its best since October 2011, while also cutting losses on the year to 8.7 percent. This compares to a 0.8 percent dip in the H-share index in 2013.
China's largest aluminum producer also announced late on Thursday it will sell about 8.2 billion yuan of assets, including production plants to mainly its parent company, according to filings to the Hong Kong and Shanghai exchanges.
Chalco's gains on Friday bucked weakness for other commodities-related counters as investors took some profits after solid gains this week that were in many cases, underpined by robust volumes as physical markets recovered from an April slump.
Any futher rebound from April lows will have to depend on Chinese banks, which have the biggest weightings in indexes in Hong Kong and China. That sector was broadly stronger on Friday ahead of China's April data for money supply and loan growth.
After markets closed, data showed Chinese banks lent 792.9 billion yuan ($129.3 billion) of new local currency loans in April, missing market expectations for 800 billion yuan and lower than March's 1.06 trillion yuan.
China extended 1.75 trillion yuan ($285.44 billion) worth of total social financing in April, central bank data showed on Friday, down from 2.54 trillion yuan seen in March.
Beijing is due to release April data for urban investment, industrial output and retail sales on Monday.