Hong Kong shares close 0.45 percent higher

The benchmark Hang Seng Index gained 86.95 points to close at 19,486.87 on turnover of HK$88.20 billion ($11.31 billion).

Monday's slight gain came as European markets moved higher in early trade and despite a region-wide sell-off caused by ongoing fears about a possible global recession, US growth troubles and the eurozone debt crisis.

Analysts expect a bumpy next few weeks as concerns about the US economy and the euro debt crisis will likely remain the major overhangs.

"Sentiment remains fragile, as seen from gold's ongoing strength," South China Research said in a note Monday.

The precious metal is sitting at record highs around $1,886 an ounce, as dealers move out of equities and into the safe haven asset.

Fashion chain Esprit jumped 3.4 percent to HK$21.20 while China Mobile was up 2.9 percent at HK$78.00 on bargain hunting.

However, gaming, retail, and cement stocks, which have outperformed other sectors this year, fell on profit-taking.

MGM China was down 8.1 percent at HK$12.96, China National Building Material fell 4.3 percent to HK$11.50 and jewellery chain Chow Sang Sang tumbled 9.9 percent to HK$26.00.

Chinese shares closed down 0.73 percent. The Shanghai Composite Index, which covers both A and B shares, ended 18.50 points lower at 2,515.86.

"Investors lack confidence in the market due to weak offshore markets. That's why the stocks are falling though the selling pressure isn't that strong," Amy Lin, an analyst with Capital Securities, told Dow Jones Newswires.

Li Lei, an analyst with Gold State Securities, said the Chinese market had outperformed its offshore counterparts, but "it's still too early to say investors' confidence has been fully restored".

Airlines were lower on concerns travel demand will fall due to weakening global and domestic economies. China Southern Airlines was down 2.7 percent at 7.64 yuan ($1.19) and Hainan Airlines fell 1.3 percent to 6.24 yuan.

Copyright AFP (Agence France-Presse), 2011