* HSI +0.8 pct, H-shares +0.7 pct, CSI300 -0.1 pct
* HSBC up 2 pct, tracks overnight strength after possible Ping An sale
* Citic Pacific slides after injunction against Clive Palmer
* Tingyi sinks further, hit by JP Morgan downgrade
By Clement Tan
HONG KONG, Nov 20 Hong Kong shares climbed to their highest in a week on Wednesday, set for a third-straight daily gain, following strong Wall Street gains on signs of a potential political compromise that could help avert a looming U.S. fiscal crisis.
In the mainland, markets reversed gains after data showed foreign direct investment inflows fell 3.5 percent in the first 10 months of the year from a year ago, extending the longest run of decline in three years.
The CSI300 Index of the top Shanghai and Shenzhen listings was down 0.1 percent at the midday trading break, while the Shanghai Composite Index shed 0.3 percent.
The Hang Seng Index rose 0.8 percent to 21,439.1, its highest since Nov 14. The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.7 percent.
"Some people are starting to come back into the market after the correction in the past two weeks, which has created some opportunities, particularly in the more cyclical sectors," said Edward Huang, an equity analyst with Haitong Securities International.
On Tuesday, shares of Chinese internet giant Tencent Holdings rose 2.9 percent, rebounding from a two-month low set on Monday after its sector rival, Nasdaq-listed Sina Corp, soared 7.8 percent overnight.
Chinese media reported that Alibaba Group, the country's largest e-commerce company, planned to buy a stake in Sina's popular "Weibo" microblogging service.
CNOOC Ltd rose 2 percent on a media report that China's state-owned oil giant has accepted management and employment conditions set by the Canadian government to win approval for its $15.1 billion takeover of Nexen Inc.
HSBC Holdings jumped 2 percent in Hong Kong, tracking strong overnight gains after Europe's largest bank said it is in talks to sell its $9.3 billion stake in China's Ping An Insurance, stepping up a programme to shed non-core operations to boost profitability.
Ping An Insurance slid a further 0.4 percent in Hong Kong and 2.2 percent in Shanghai.
TINGYI AT LOWEST SINCE AUGUST
Also limiting gains in Hong Kong, Citic Pacific dived 4.5 percent to its lowest in more than a month after it filed a court injunction against Australian mining tycoon Clive Palmer over disputed royalties at the $8 billion Sino Iron project in Western Australia, the latest in a long list of hurdles for the troubled project.
Food and beverage giant Tingyi Holdings slid a further 3.9 percent to HK$22.05, its lowest since Aug. 22, hurt by a JP Morgan downgrade after its underwhelming third quarter earnings on Monday.
JP Morgan analysts downgraded Tingyi from "neutral" to "underweight", while reducing their June 2013 price target from HK$18.00 to HK$16.00, saying the premium it typically trades over its sector peers is now "stretched".
"We find decelerating sales growth in beverages disappointing, especially in the case of Tingyi which typically trades at a premium to the sector due to its stable double-digit sales growth," they said in the same note.