* HSBC slides, dragging HSI to six-week low
* Sinopec drops in Shanghai after skimpy fuel price increase
* Airline stocks dive on jet fuel price hike
* Bank stocks gain in China after August lending data
(Updates to close)
By Parvathy Ullatil and Claire Zhang
HONG KONG, Sept 2 (Reuters) - Hong Kong shares dropped 1.8 percent to a six-week closing low on Wednesday as anxiety about the global financial sector dragged down shares in HSBC, while Beijing's latest fuel price hike sent airline shares diving.
Elsewhere, China's key stock index closed 1.2 percent higher in shrinking trade, led by the banking sector after slightly better-than-expected August lending data, but technical charts show the index has entered a more sustained downward channel.
Top refiner Sinopec rose 0.8 percent to HK$6.59 after China raised retail fuel prices by about 4-5 percent from Wednesday to a near-record high to track global crude prices, which have gained nearly 10 percent since Beijing's last price change just over a month ago.
But the stock was unchanged at 11.31 yuan by the close of trade in Shanghai as analysts weighed in on the price increase as too skimpy to protect the company's refining margins.
Asia's largest oil and gas producer PetroChina, which is now the world's second largest energy company by market value after being overtaken by Exxon dropped 1.7 percent to HK$8.50.
"The price hike came later than the market was expecting it to and from the small size of the increase its clear the government doesn't want to make consumers unhappy ahead of the national day celebrations," said said Philip Chan, head of research with CAF Securities.
HSBC, CNOOC WEIGH
The benchmark Hang Seng Index was 1.8 percent lower at 19,522.00 with shares worth HK$53.2 billion ($6.86 billion) changing hands.
"Some Hong Kong-listed Chinese heavyweights, such as the financials, have outperformed their A-shares in recent weeks and that's another reason driving the selling today," said CAF Securities' Chan.
The average premium between mainland-listed A-shares and their Hong Kong-listed H-share counterparts rose to 21.3 percent, bouncing off the eight-month low it hit on Monday.
A handful of stocks including top lender ICBC and insurer China Life command a better valuation in Hong Kong than Shanghai.
The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was down 1.3 percent at 11,192.39.
HSBC Holdings led losses, dropping 3.2 percent, tracking the slide in other global bank stocks overnight as worries about the health of the U.S and European financial sectors resurfaced.
Its London-listed stock slid 4.2 percent while its New York-listed shares shed 2.9 percent on Tuesday.
Offshore oil specialist CNOOC fell 2 percent as oil prices fell nearly 3 percent overnight and stayed around $68 a barrel on Wednesday as economic concerns sent investors into safe haven assets.
China's flagship carrier Air China dropped 4.6 percent after the government hiked jet fuel prices by about 6 percent from Wednesday to follow a revamped fuel pricing system.
China Southern Airlines, which has the largest fleet among its peers, fell 2.9 percent while China Eastern Airlines gave up 5.8 percent.
BANK STOCKS GAIN IN SHANGHAI
The Shanghai Composite Index closed at 2,714.974 points, continuing a small 0.6 percent rise on Tuesday on technically driven buying and positive manufacturing data, which indicated that China's economic recovery was on track.
Minsheng Banking Corp, China's first listed non-state lender, was the day's most active stock, closing up 3.1 percent at 6.38 yuan.
But the index closed lower than the 125-day moving average at 2,763 points, a key technical level, for a third day.
The effective downward breakthrough of this major technical support -- used by investors to delineate between a bull versus a bear market -- means the level now poses a key resistance, pointing to more downward pressure for the market in the near term.
"Although the key technical level has been broken, Chinese economic recovery in the second half of the year could keep the momentum intact, which may limit room for a further steep drop," said Li Shiming, senior analyst from Xiangcai Securities.
Gaining Shanghai A shares outpaced losers by 578 to 274, while turnover for Shanghai A shares fell to 88 billion yuan ($13 billion), the lowest level since March 16 and down from Tuesday's already thin 101 billion yuan.
Chinese banks extended about 320 billion yuan ($46.9 billion) in new loans in August, the lowest monthly total this year, and down from July's already small 356 billion yuan, Reuters reported late on Tuesday.
Analyst said the data, which was also reported by local media on Wednesday, slightly beat market expectations of no more than 300 billion.
Huatai Securities analyst Chen Huiqin in Nanjing said Chinese banking stocks typically lead the market up or down, and their gains on Wednesday may mean the index could have less room to fall in the near term than in the past few weeks.
The index tumbled 22 percent in August, in its second biggest monthly fall in 15 years. It had fallen to a three-month intraday low early on Tuesday, depressed by worries about new share supplies and a clampdown on bank lending that could constrain the flow of funds into the stock market.
(Editing by Jacqueline Wong and Jonathan Hopfner)