* CSI300 -0.1 pct; SSEC -0.2 pct; HSI -0.3 pct
* Stocks in some China service sectors up on positive survey
* Financial stocks down on economic worries
By Samuel Shen and Pete Sweeney
SHANGHAI, March 4 (Reuters) - China stocks ended lower on Wednesday morning, as early gains following a private survey showing growth in the service sector were erased by continuing worries about the economy.
Investors are seeking fresh policy cues from this week’s meeting of China’s legislature, the National People’s Congress.
Stocks in the pharmaceutical, media and entertainment sectors posted strong gains after the HSBC Markit survey showed activity in China’s service sector grew modestly in February as new orders rose at their quickest pace in three months.
But offseting the gains were weakness in financial heavyweights and real estate stocks, which reflects lingering worries over economic health.
“The service sector has been relatively stable, but what investors are more concerned is the health of the industrial sector,” said Zhang Chen, analyst at Shanghai-based hedge fund manager Hongyi Investment.
“We expect to see continued pattern of volatility as investors are looking for directions.”
The CSI300 index was down 0.1 percent at the end of the morning, while the Shanghai Composite Index lost 0.2 percent.
The Hang Seng index dropped 0.3 percent, to 24,623.33 points. Hong Kong retail stocks, including Sa Sa International , Chow Tai Fook and Giordano International sagged on news Hong Kong retail sales in January slid 14.6 percent from a year earlier, their worst showing since 2003.
Bucking the broader trend, China’s Shenzhen Composite Index rose nearly 1 percent and the city’s Chinext , which tracks China’s high-growth start-ups, flirted with fresh highs, bolstered by hopes more foreign investors will be able to invest in Shenzhen-listed stocks.
Hong Kong chief executive C.Y. Leung told reporters on Tuesday that preparatory work for a Hong Kong-Shenzhen stock connect was going “smoothly”.
The outperformance of stocks in Shenzhen is also partly the result of investors shifting money from blue chips into smaller play, amid worries of tighter liquidity ahead, analysts said.
China’s stock regulator on Monday approved 24 initial public offerings. Some analysts expecting them to lock up about 3 trillion yuan ($478.4 billion) of capital next week.
Most clean-tech stocks fell on Wednesday, following a strong two-day rally when a documentary about China’s filthy air went viral in the country. However, analysts said the sector may remain active as investors expect more policies to promote a cleaner environment.
$1 = 6.2712 Chinese yuan Editing by Richard Borsuk