* SSEC 0.6 pct, CSI300 0.7 pct, HSI -0.1 pct
* China service sector grow the fastest in 4 months in Oct
* Hong Kong may get liquidity support from Shenzhen Connect-trader
SHANGHAI, Nov 3 (Reuters) - Hong Kong stocks pared early losses on Thursday after a survey showed China’s services sector grew at its fastest pace in four month, but gains were capped by worries over the tightening U.S. presidential election race.
China equities, which are less vulnerable to global market volatility, edged up by midday, aided by signs of looser liquidity in the banking system.
Hong Kong’s benchmark Hang Seng index dipped 0.1 percent to 22,782.21 points by midday, having touched the lowest level since Aug. 11 in early trading on U.S. election jitters.
The Hong Kong China Enterprises Index gained 0.1 percent.
China’s blue-chip CSI300 index rose 0.7 percent to 3,357.5, while the Shanghai Composite Index gained 0.6 percent to 3,120.5.
“In the short term, the U.S. election represents the biggest risk to investors, who don’t like surprises,” said Charles Wang, Chairman of Shenzhen-based Appleridge Capital Management Co.
Narrowing polls in the past week have led markets to price in more risk that Republican Donald Trump might defeat his Democratic rival Hillary Clinton, perhaps remembering the turmoil that followed the surprise Brexit vote.
However, Wang said he expects the Hong Kong market to get support from mainland investors soon as the Shenzhen-Hong Kong Stock Connect scheme will be launched as soon as this month.
Investors are already responding to headline news that a global roadshow promoting the Connect scheme has been completed, pushing up shares of mainland brokerages listed in Hong Kong and China, betting they will benefit from the programme.
Earlier in the day, a private survey showed growth in China’s services sector accelerated in October, reinforcing the view that the world’s second-largest economy is on a steadier footing.
But financial and telecom sectors in Hong Kong were among just a few sectors that ended morning trading in positive territory.
In China, most sectors rose, led by financial and infrastructure stocks, amid signs that both short-term rates and longer-term treasury yields are edging lower, easing concerns of tighter liquidity.
Reporting by Samuel Shen and John Ruwitch; Editing by Kim Coghill