* HSI +0.2 pct, H-shares -0.5 pct
* HK turnover weakest since September, minus last 4 sessions in 2012
* Esprit soars after UBS upgrade raises turnaround hopes
* China shut for 3-day Labor Day holiday
China coal shares led losses among commodity and industrial sectors in Hong Kong on Monday after disappointing quarterly earnings doused recovery hopes, capping broader market gains.
The benchmark Hang Seng Index ended up 0.2 percent at 22,580.8 points, as strength for index heavyweight HSBC Holdings and Esprit Holdings after an upgrade left the benchmark lingering at six-week closing high.
Esprit was a standout outperformer, jumping 4.8 percent to its highest in three months, thanks to the upgrade from "neutral" to "buy" by UBS analysts, who believe its turnaround prospects have improved following more focused execution.
The China Enterprises Index of the leading Chinese listings in Hong Kong slipped 0.5 percent. Excluding holiday-reduced trading in the last four trading sessions of 2012, turnover was the weakest since September, the start of a rally fuelled by U.S. quantitative easing.
Mainland China markets were shut for a three-day public holiday and will only resume trading on May 2. Hong Kong also will be closed on May 1.
"Some of the coal companies managed to disappoint reduced earnings expectations and coal prices are still weak, so we're likely to see more share price weakness from here," said Jackson Wong, Tanrich Securities' vice-president for equity sales.
But some leading players in the Chinese coal, steel and cement sectors may be better placed to outperform due to better cost management as these sectors consolidate.
Shares of the mainland's largest coal producer, China Shenhua Energy outperformed, shedding 0.7 percent after it posted a 1.2 percent decline in quarterly net profit. This is opposed to the 38 percent earnings decline recorded by smaller rival China Coal Energy.
China Coal fell 6.2 percent on Monday.
Its weak results triggered a series of brokerage price target reductions for the firm, with JP Morgan cutting theirs by 11 percent. They cited its rising gearing ratios as a near-term concern after results showed the company was unable to maintain stringent cost controls as it did the previous two quarters.
Goldman Sachs said Shenhua's diversified assets will continue to help mitigate the impact from coal price weakness. Goldman believes coal prices will stay weak through 2015 and combine with inflation to squeeze the margins of Chinese coal companies.
Conversely, China power producers were buoyed by lower coal prices. Huaneng Power and China Resources Power each climbed 1.8 percent on the day.
STEEL OVERCAPACITY WOES LINGER
The Chinese steel sector was also weaker despite signs of a turnaround by Angang Steel after the China's steel industry body warned its members on Saturday to rein in expectations for the remainder of the year.
Angang dived 3.4 percent after China Iron and Steel Association (CISA) officials said an anticipated increase in demand would not be enough to justify big rises in production in coming months. They added that the government was looking for new ways to restructure the sector, which was still facing massive problems.
Official data on Saturday showed industrial profits rising 5.3 percent in March from a year ago, compared with the 17.2 percent increase for the first two months. On the quarter, industrial profits rose 12.1 percent.