* HSI -1.4 pct, H-shares -1.8 pct, CSI300 -0.6 pct
* Banks lead slide, H-shares unwind Wednesday gains
* CITIC Securities hit by pledge to open up brokerage sector
* Inner Mongolia Yili spikes on 80 percent profit alert
By Clement Tan
HONG KONG, Jan 23 (Reuters) - Hong Kong shares sank to their lowest level in over a week on Thursday, led by the Chinese financial sector, after a private preliminary survey showed factory activity shrank slightly in the world's second-largest economy in January.
The A-share market was relatively more resilient after the central bank injected another 120 billion yuan ($19.83 billion) through 21-day reverse bond repurchase agreements at the second of two scheduled weekly open market operations.
By midday, the CSI300 of the largest Shanghai and Shenzhen A-share listings was down 0.6 percent, while the Shanghai Composite Index slipped 0.5 percent. Both posted their biggest daily gain in two months on Wednesday and closed at their highest in more than two weeks.
The ChiNext Composite Index of startups in mainly nascent industries listed in Shenzhen outperformed, jumping 1.7 percent to yet-another record high.
The Hang Seng Index fell 1.4 percent to 22,766.3 points, its lowest intra-day level since Jan. 14. The China Enterprises Index of the leading offshore Chinese listings in Hong Kong sank 1.8 percent.
Losses for the H-share index erased Wednesday's gains, which had came on the back of a gigantic cash injection by the People's Bank of China that calmed money markets in the mainland earlier in the week.
Volumes in Hong Kong and mainland markets were overall less robust than Wednesday.
The flash Markit/HSBC Purchasing Managers' Index fell to 49.6 in January from December's final reading of 50.5, dropping below the 50 line which separates expansion of activity from contraction for the first time in six months.
"The weak flash PMI will inevitably inflame China slowdown worries, but this is only one data point," said Linus Yip, a strategist with First Shanghai Securities in Hong Kong.
"If more data start to also show a deeper slowdown, Beijing may be forced to stimulate in order to maintain a stable basis for growth that they need to execute reforms," Yip added.
China has created six teams to supervise its boldest economic and social changes in 30 years, with President Xi Jinping and Premier Li Keqiang personally taking charge, state media said on Wednesday.
The Chinese banking sector weighed heaviest on indexes. Industrial and Commercial Bank of China H-shares, which closed on Wednesday at the highest in two weeks, sank 2.6 percent.
In Shanghai, mid-sized lenders Minsheng Bank and Industrial Bank each slid more than 1 percent to trim weekly gains after the PBOC injected a net 375 billion yuan into the market this week, its largest weekly injection in nearly a year.
The banking sector has also been pulled lower by concerns of a possible default of a trust product that ICBC had helped to market.
China Credit Trust Co Ltd, whose product could set a landmark precedent for default in China's fast-growing shadow bank sector, said it is in discussions with new investors in an effort to raise the funds necessary to pay off current investors when the high-yielding product matures on Jan. 31.
CITIC Securities tumbled 4 percent in Hong Kong and 1.5 percent in Shanghai after the chairman of the China Securities Regulatory Commission said the country will aim to limit the stakes foreign firms can take in local securities institutions, while permitting them to set up wholly owned entities.
With the next corporate earnings reporting season due to kick off at the end of February, companies are obligated by exchanges to issue profit-loss advisories.
Esprit Holdings pared early gains to go into the lunch break up 1.2 percent after the struggling clothing retailer said it expects to return to profit in the first half of the business year as efforts to cut costs kick in.
The Macau casino sector extended losses, with Sands China diving nearly 3 percent and Galaxy Entertainment sliding 2 percent. JP Morgan had on Wednesday downgraded the sector, advising clients to take some profit on its strong share price rally ahead of earnings.
There were gains for the shares of Inner Mongolia Yili , which jumped 4.7 percent in Shanghai after the dairy producer said it expects 2013 net profit to surge by about 80 percent from a year earlier.