* Hang Seng down 1.3 pct as stocks retreat from 2011 high
* Resources sector hit by broader commodity weakness
* Weakness an opportunity to buy defensives, airlines: traders
* China shares flat, steel offsets energy sector dip (Updates to close)
By Vikram Subhedar and Farah Master
HONG KONG, April 12(Reuters) - Tumbling oil and commodity prices weighed on shares of resource companies in Hong Kong and Shanghai on Tuesday, pulling the Hang Seng index down 1.3 percent.
Oil's
Petrochina shares fell nearly 5 percent in Hong Kong, their worst single-day slump since February last year, while rival CNOOC fell 2.9 percent.
Petrochina shares had run up more than 14 percent in the last month, while CNOOC had surged close to 16 percent, leaving them technically overbought and susceptible to profit taking.
The oil majors were the biggest drag on the Hang Seng , which fell to 23,976.4 points, retreating further from a 2011 peak hit last Friday after three successive weeks of gains.
Energy stocks also weighed on China's main stock market , but were largely offset by strength in steel shares, leaving the Shanghai index little changed on the day.
"I am absolutely on the side where I expect oil to come down," said Brynjar Bustnes, head of regional oil and gas for Asia-Pacific at J.P. Morgan in Hong Kong.
"Whatever happens in Libya will be negative for oil prices because the worst case is really priced in," he said, but cautioned that sudden spikes may still occur.
The energy sub-index in Hong Kong was the worst performerm dropping 2.7 percent on the day. Despite Tuesday's drop, the index's 9 percent rise this year is more than double that of the Hang Seng over the same period.
Analysts at Nomura said in a note that as economic growth in China slows cyclical stocks, such as energy and materials, are likely to fall behind, while defensives such as telecoms stand to benefit from sector rotation.
Another sector seeing buying interest was airlines, traders said. Any drop in jet fuel prices would help ease massive pressure on carriers' profit margins.
"We're hearing around the street that there are hardly any real sellers of airline stocks at these levels - prop desks have been bidding for stock and coming up empty," said a head trader at an institutional brokerage in Hong Kong.
Air China gained 1.9 percent on the day while Cathay Pacific , last year's top performer but a major laggard this year, was flat on the day.
SHANGHAI LITTLE CHANGED, STEEL SUPPORTS
China's main stock index ended down 0.1 percent at 3,021.4 points, with strength in steel makers countering weakness in resources, banks and property issues.
Investors also remained wary of staking out fresh positions ahead of upcoming economic data, including first quarter GDP and March inflation readings on Friday, which may give clues on how much more policy tightening can be expected. [ID:nL3E7F70G2]
"The index faces pressure above the 3,000-point level," said Chen Shaodan, analyst at China Development Bank Securities in Beijing, but he added that the uptrend was still intact.
Some analysts expect China's economy may grow at a slower pace in the first quarter, while consumer inflation is expected to hit around 5 percent, a China Securities Journal report said.
Cheng Yi, analyst at Xiangcai Securities in Shang, said "the economic data may increase worries over high inflation pressure."
The natural resouce index fell 2 percent, with the sub-index of financial shares down 0.4 percent and the property sub-index off 0.3 percent.
But steel makers outperformed on expectations of stronger earnings and a rebound in steel demand as Japan begins to rebuild after a massive earthquake last month.
"Strong steel exports, combined with stronger earnings expectations, (are) contributing as positive catalysts for share prices in our view," analysts at Bank of America Merrill Lynch, said in a research report.
Two steel makers were among the top 10 biggest gainers on the Shanghai market.
Nanjing Iron & Steel was the top gainer, jumping its 10 percent daily limit, while Anyang Iron & Steel rose 8.5 percent.
Hebei Iron and Steel Co , the most active and biggest gainer on the Shenzhen market, rallied by its 10 percent daily limit, while Baoshan Iron & Steel Company , the third-most active share on the Shanghai market, jumped 2.9 percent.
China Shipbuilding Industry was up 5.1 percent after it said it planned to raise up to 12.5 billion yuan ($1.9 billion) by selling new shares to a select group of investors. [ID:nL3E7FC00K] (Editing by Kim Coghill) Pan-Asia..... Japan........ S.Korea.... S.E. Asia........... Hong Kong... Taiwan..... Australia/NZ........ India....... China......
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