Hong Kong shares pared early gains to end lower on Monday, dragged by weakness in financials, tracking a pull back in intraday gains in mainland markets and ahead of earnings reports from key blue chips.

The Hang Seng Index closed down 0.88 percent at 21,217.86. The China Enterprises Index of top mainland listings in Hong Kong ended down 1.28 percent at 11,540.23.

The Shanghai Composite Index finished up 0.3 percent at 2,447.06, the highest close since Nov. 17 last year, but near the bottom of its intraday trading range as A-share turnover reached the highest since March 29.

HIGHLIGHTS:

* HSBC Holdings Plc, scheduled to post its 2011 earnings results later on Monday, was the top drag on the Hang Seng Index, losing 1.2 percent to close below HK$70 for the first time since February 16. Market watchers cited the relatively big spread in earnings estimates as the source of jitters. According to Thomson Reuters StarMine, the difference between the lowest and the highest earnings-per-share estimate is $0.26.

* Escalating oil prices hit airlines hard. Air China slumped 5.9 percent to HK$5.59, barely holding above its January 6 low at about HK$5.54. Losses came in volume almost five times its 30-day average, highest since April 13.

* Chinese automakers surged after Beijing excluded foreign brands in a preliminary list of vehicle models approved for purchase by state agencies this year. Great Wall Motor Co Ltd was jumped 5.5 percent and Geely Automobile Holdings Ltd gained 3.8 percent, both in volume double their respective 30-day averages. - Reuters