* CSI300 flat; SSEC +0.1 pct; HSI +0.4 pct
* Activity in China’s service sector strengthened in March
* Foreign interest in China stocks rising - UBS
SHANGHAI, April 6 (Reuters) - China’s main share indexes stayed firm at their highest levels since early January as the latest survey on China service sector activity provided fresh evidence of a nascent economic recovery.
The blue-chip CSI300 index was flat at 3,264.20 points by lunch break, while the Shanghai Composite Index gained 0.1 percent, to 3,055.68 points, staying comfortably above 3,000 points - a level seen by many as psychologically important.
Hong Kong stocks rose slightly. The Hang Seng index added 0.4 percent, while the Hong Kong China Enterprises Index gained 0.3 percent.
Activity in China’s service sector strengthened last month, according to the Caixin/Markit services purchasing managers’ index (PMI), which in March rose to 52.2 from February’s 51.2.
March’s moderate expansion in the service sector, which follows rises in January-February industrial profits and PMI, lends support to belief that China’s economy is improving on the back of Beijing’s supportive measures.
“The improvement in economic indicators, rising property prices, and the US Fed’s dovish stance have helped increase overseas investors’ risk appetite for A-shares and attract foreign capital to the A-share market,” UBS strategist Gao Ting wrote in an emailed comment.
To illustrate this trend, USB said several large overseas listed exchange-traded funds (ETFs) that track A-share indices saw net subscriptions, and since March, the northbound leg of the Shanghai-Hong Kong Stock Connect scheme has seen net purchases of 18.1 billion yuan ($2.80 billion).
Also, latest data shows that China’s outstanding margin loans at the end of March rose from a month earlier, ending a three-month losing streak and signalling that mainland investors are starting to borrow more to buy stocks.
Sector performance varied on Wednesday, with consumer stocks doing better than the indexes while banking and real estate sagged.
In Hong Kong, most sectors rose.
The financial sector was down 0.3 percent, underperforming the market. ($1 = 6.4750 Chinese yuan)
Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk