HANDKERCHIEFS. The custom of keeping a handkerchief in the hand, as is frequently practiced, is said to be abominable (makruh). Many, however, hold that it is allowable, if done from motives of necessity. This, says Abu Hanifah, is approved; for the practice is abominable only when it is done ostentatiously. (Hidayah, vol 1 p. 95)
Based on Hughes, Dictionary of Islam