HK shares close up 0.7 %

Hong Kong shares ended slightly higher for a second straight session on Thursday on a relief rally in anticipation of a resolution to Europe's debt crisis, but strong gains in defensives and lacklustre turnover pointed to lingering caution, according to Reuters. The Hang Seng Index closed up 0.71 percent at 19,181.5. The China Enterprises Index finished up 0.83 percent at 10,051.67. The Shanghai Composite Index ended down 0.23 percent at 2,479.05, extending the benchmark's struggle for direction over the past month as A-share turnover remained below the 20-day average. HIGHLIGHTS: * Strong gains in defensive names despite high valuations point to lingering risk aversion. Power Assets Holdings Ltd , up nearly 30 percent this year, gained 3.9 percent. China Unicom (Hong Kong) Ltd was up 2.7 percent. Unicom's 55 percent rise this year has taken its forward 12-month valuation on a price-to-earnings basis 77 percent higher than the long-term historical median. Unicom trades at 31.2 times forward 12-month earnings, suggesting trade could be getting crowded. * Europe-focused apparel retailer, Esprit Holdings Ltd plunged 17.6 percent in volume more than five times its 30-day average to the lowest since May 2003. The company posted a 98 percent drop in full-year net profit as restructuring costs and store closures hit. 'In this market, investors are going to punish any small mistake. It is very difficult for investors to stomach such of losses,' said Hong Hao, a global strategist with CICC in Beijing. He added that the timing of the announcement probably exaggerated its losses on the day, but said specific issues with its business focus in North America and Europe would compound problems for the consumer discretionary stock.