Property stocks gained, however, on reports of strong new residential property sales over the weekend.

"There's no fresh news. We're stuck, although response to new project launches over the weekend was supportive for property stocks," said Phillip Securities research director Louis Wong.

The blue-chip Hang Seng Index ended 0.22 percent, or 34.13 points, lower at 15,394.39.

Dealers expect the blue-chip index to test 4-year highs just above 15,500, but said investors required a fresh catalyst in what is expected to be a relatively quiet week with mainland markets closed for the Golden Week holidays.

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Property firm Sino Land was the top performing blue chip, rising 3.2 percent to HK$9.75 after reports of strong weekend of sales at its new luxury residential project. The stock tapped levels last seen in late 1996 in intraday trade. The Hang Seng properties subindex rose 0.48 percent.

Power equipment maker Shanghai Electric Group led H-share stocks higher. The stock rose 4.8 percent to HK$2.75, adding to strong gains over the past three months, as investors eye China's efforts to build up its power plant capability to fend off shortages.

Leisure firm Shun Tak Holdings rose 3.5 percent to HK$6.65 after investors applauded news last week of a joint venture with Singapore-listed Hongkong Land Holdings to develop commercial property in Macau.

JPMorgan upgraded its target price on Shun Tak shares to HK$9 from HK$8.40 and said teaming up with Hongkong Land should help "upscale" the position of the property, which will be turned into retail space and a hotel.

The mainland's largest integrated copper producer Jiangxi Copper fell 1.14 percent to HK$4.32 on easing copper prices. Goldman Sachs lowered its rating on the stock to "in-line" from "outperform," citing rising risk versus reward.

China-focused Internet portal and media company TOM Group jumped 8.05 percent to HK$1.61 after a local newspaper reported some overseas media companies were interested in buying some of its assets and it may consider selling them if the price is right.

China's largest cotton textile producer, Weiqiao Textile, fell 1.96 percent to HK$10 after the United States delayed a decision on whether to restrict more clothing imports from China. REUTERS