Asian shares were mixed on Thursday as uncertainty over the outcome of the U.S. presidential race continues to keep traders on edge.

Activity in China's service sector expanded at a faster pace in October, a private gauge showed Thursday, adding to recent signs of firmness in the country's economy. The Caixin China services purchasing managers index rose to 52.4 in October from 52.0 in September.

A reading above 50 indicates a month-to-month expansion while a reading below that points to a contraction. This added to the encouraging manufacturing PMI data for China released Tuesday.

"I think it's very positive," said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets about the strong Caixin data."It also confirms to me that China should reach its GDP goal for the year?equities are also taking note."

South Korea's Kospi was down 0.1%, Hong Kong's Hang Seng Index was down 0.4% and Australia's S&P/ASX 200 was down 0.1%. Japan's exchange was closed for a holiday.

Australia's monthly trade deficit narrowed in September with forecasters expecting surging coal prices to deliver further sharp improvement in coming months. The resource-rich economy posted a seasonally adjusted trade deficit of 1.23 billion Australian dollars in September, compared with a deficit of A$1.89 billion in August, the Australian Bureau of Statistics said Thursday.

China's domestic stocks opened lower but started to trade up on the back of the strong Caixin PMI data. The Shanghai Composite was up 0.2%.

The U.S. Federal Reserve left interest rates unchanged as expected on Wednesday, while sending hints that it expects to raise them in December. All eyes will be on the U.S. jobs data scheduled for release on Friday for further clues on the health of the country's economy. But the biggest concern remains the U.S. presidential election next week.

"The base case is most likely Hillary Clinton" for the win, said Mr. Moltke-Leth. "Obviously if not, which is a possibility that we cannot rule out, it could have impact on risk appetite."

Michael McCarthy, chief market strategist at CMC Markets, added: "We are seeing support for the bond market?good support for gold. It's a rebalancing of portfolios to acknowledge the risk event next week."

James Glynn, Anjie Zheng and Liyan Qi contributed to this article.

Write to Willa Plank at willa.plank@wsj.com

(END) Dow Jones Newswires

November 02, 2016 23:35 ET (03:35 GMT)

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