* FTSEurofirst down 0.6 percent
* Safe haven assets outperform ahead of US election
* Miners fall in tandem with copper after China data
* Banks knocked as HSBC takes Q3 profit hit
* Ryaniar boost by raised guidance
By David Brett
LONDON, Nov 5 (Reuters) - European shares dipped lower by midday on Monday as investors took shelter in safer havens ahead of the U.S. election and banks fell after HSBC announced a hit to third-quarter profits.
By 1200 GMT, the FTSEurofirst had fallen 6.75 points, or 0.6 percent to 1,108.44, having risen 1.6 percent last week to near early September highs of 1,020 fueled by better economic data in Asia and the U.S.
This week will be dominated by political and economic developments which will increase investor uncertainty, with the once-a-decade power transfer in China and Greece's attempt to gain political support for measures to obtain further aid in focus.
But the main event will be the U.S. presidential election on Tuesday.
"Equities will remain range bound until after the elections," Jawaid Asfar, trader at Securequity, said.
"An Obama victory looks priced in but a Romney victory may cause shares to rally further as his pledge to keep taxes low would help the well-off and business alike," Asfar said, adding pharmaceuticals may perform better on an Obama victory and financials on a Romney win.
Evidence that investors were being cautious was seen in the near two-month high for the dollar index, while volumes were a paltry 20 percent of their 90-day average on the FTSEurofirst.
"We continue to see investors sit on their hands," James Humphreys, senior investment manager at Duncan Lawrie Private Bank, said.
"Those who are making investment decisions risk missing out if they're sitting in cash and fixed interest rather than being prepared to buy equities even though the valuations are quite reasonable," he said.
Against the murky economic and political backdrop, however, investors continue a flight towards quality assets and desert miners and banks -- assets which tend to underperform in an uncertain economic environment.
Miners weakened in tandem with copper prices after downbeat China service sector data took the gloss off the previous week's encouraging PMI figures.
Banks shed 1.1 percent with heavyweight lender HSBC proving a major drag on the sector, down 1.2 percent after its third-quarter profit was dented by U.S. fines for anti-money laundering rule breaches, which could cost the company more than $1.5 billion.
Some 48 percent of European companies have missed profit expectations so far in the third-quarter, lagging a far better performance from U.S. peers, according to Thomson Reuters data.
With sentiment depressed ahead of the U.S. elections and against the uncertain earnings backdrop, perceived quality names in healthcare and food and beverages outperformed.
The index's best gainers were those companies that offered some light for investors at the end of a gloomy earnings tunnel.
A 10 percent jump in first-half profit and raised guidance propelled Irish low cost airline Ryanair 6.6 percent higher, helping lift peer Easyjet and the broader travel and leisure sector.
Weir climbed 5.7 percent after the firm assuaged concerns over the outlook for engineers by saying it was on track to meet expectations for the full year.
Despite nearly half the companies that have so far reported in Q3 missing expectations, analysts have increased fourth-quarter estimates by around 1 percent for those corporates, according to Thomson Reuters Starmine data.
On the downside mail delivery firm Post NL fell 9.4 percent after saying it expects mail volume to decline by to 10 percent.
That knocked peer TNT Express which shed 3.4 percent. TNT recently announced a 12 percent fall in quarterly profit.