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July 3 (Reuters) - Financial shares rose in Hong Kong on Monday, on the back of a new bond trading link between Hong Kong and China, but the overall market was largely flat as blue-chips generally underperformed and the service sector slipped.
The Hang Seng index rose 0.1 percent, to 25,784.17 points, while the China Enterprises Index gained 0.5 percent, to 10,412.48 points.
Financial stocks are the biggest beneficiaries from the "Bond Connect", which initially allows foreign institutions to buy China's onshore bonds, starting Monday.
Index heavyweight HSBC Holdings PLC - which conducted the first deal under the "Bond Connect" - rose 1.5 percent, while BOC Hong Kong, another beneficiary of the cross-border scheme, jumped 1.7 percent.
Hong Kong's small-caps and mid-caps rose sharply after Beijing on Friday allowed insurers to buy the city's stocks under the Shenzhen-Hong Kong Stock Connect, potentially boosting demand for smaller companies. Service companies lost more than 1 percent. (Reporting by the Shanghai Newsroom; Editing by Richard Borsuk)