HK shares erase early gains as local developers weigh

* HK shares turn lower as investors dumped local developers

* Financials rise on China measures to boost liquidity

* Telecoms gain on 3G licence speculation

(Updates to close)

By Jun Ebias

HONG KONG, Dec 4 (Reuters) - Hong Kong shares fell 0.6 percent on Thursday, wiping out a 2 pecent gain earlier in the day, as investors dumped local developers after lenders such as HSBC (0005.HK) raised their Hong Kong mortgage rates.

But Chinese financial stocks held on to their gains in response to Beijing's planned measures to further boost liquidity.

The benchmark Hang Seng Index .HSI closed the session 78.88 points lower at 13,509.78, led by a 2.2 percent drop in HSBC.

Sentiment turned grim in the afternoon session after Swiss lender Credit Suisse (CSGN.VX) said it had a net loss of $2.5 billion at the end of November and it was shedding 5,300 jobs. [ID:nL4454056]  Continued...