The Hang Seng Index closed down 0.1 percent at 19,666.2, slipping below its 200-day moving average, now at 19,681.7, a technical level it has struggled to stay above since mid-May.
But the Hong Kong benchmark finished off the day's lows after European markets opened higher. For the week, it was up 2 percent, extending its outperformance compared with onshore Chinese markets into a third week.
The Shanghai Composite Index and the CSI300 Index of the biggest Shanghai and Shenzhen listings each rose 0.2 percent this week, largely on the back of Shanghai's best day in slightly more than a month on Friday.
In 2012, the Hang Seng is gained 6.7 percent, while the CSI300 is up 0.3 pct YTD and the Shanghai benchmark is down 3 pct.
On Friday, Shanghai rose 1 percent while the CSI300 gained 0.8 percent. Both were lifted by property stocks, after mainland media reported that the housing ministry denied rumours circulating on Thursday that more curbs would be put on the sector.The rumours had put markets in a spin.
Still, volume in both markets stayed lackluster on Friday. Shanghai is still hovering near 41-month lows.
Over the week, the Chinese securities regulator sought to bolster sentiment in mainland stock markets by further cutting transaction fees and encouraging companies to buy back their own stock.
"Investors need to see signs of real fundamental change in the Chinese economy for them to come back into the market at this point," said Edward Huang, Haitong International Securities' equity strategist.
They will be looking to July economic figures that Beijing is scheduled to release next week, starting with data for inflation, urban investment, industrial output and retail sales, which are expected on Aug. 9.
The interim earnings season will enter its peak next week. Among the more prominent companies expected to report are China Vanke on Aug. 8, then exporter Li & Fung and Prudential Plc on Aug. 9.
On Friday, Li & Fung, which manages supply chains for U.S. retailers such as Wal-Mart Stores Inc and Target Corp , shed 2.3 percent after U.S. manufacturers suffered an unexpected drop in orders in June.
The ECB's failure to take any bold steps at its meeting on Thursday to address a debt crisis, following the Fed's decision to refrain from easing a day earlier, turned investors away from riskier assets.
Shares that led the way in a five-day rally that ended on Thursday were among the biggest losers. On Friday, Chinese oil major PetroChina shed 1.8 percent. Angang Steel slumped 4.8 percent, halving gains on the week.
CHINA PROPERTY SEE SOME RESPITE
Property shares rebounded after media reports that the housing ministry had denied rumours that developers would be barred from selling homes before they are completed.
Ninety percent of developers' residential properties in cities are sold this way, Deutsche Bank analysts said in a note to clients dated Aug. 2, and such a move would have led to a huge drop in supply and sharp rise in house prices, contrary to the government's intentions.
Shanghai-listed Poly Real Estate rose 1.8 percent after suffering a 9 percent hammering on Thursday. In Hong Kong, China Overseas Land gained 1.7 percent.
China auto stocks were hurt by mainland news reports that Xi'an could be the fifth city to impose vehicle purchase restrictions. Geely Auto slipped 2.8 percent in Hong Kong, while in Shanghai, Great Wall Motor fell 5.3 percent and SAIC Motor lost 3.9 percent.