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HONG KONG, March 13 (Reuters) - Hong Kong stocks fell nearly 5 percent on Thursday, as weak U.S. and mainland stock markets damped investor confidence, undoing gains from the last session when global equity markets cheered a credit bailout by central banks.
China Railway Construction Corp, the world's biggest IPO so far this year with listings in Hong Kong and Shanghai, rose in its first day of trade, although poor market conditions weighed.
The infrastructure play, which drew record demand for its $5.4 billion Hong Kong IPO [ID:nHKG188525], was the day's most active stock, finishing at HK$12, up 12 percent from its IPO price of HK$10.70. It rose as much as 18 percent to HK$12.66.
"In any normal market, a 20 percent upside is seen as quite healthy, but with the excesses of last year, people will view it as a disappointment -- even though they shouldn't," said Andrew Clarke, trader at Societe Generale Securities.
The market deepened its losses in the afternoon, taking cues from mainland equity markets. Investors were worried that China may impose further tightening measures as inflation rose to near 12-year highs.
The benchmark Hang Seng Indexclosed near the day's low, down 4.8 percent, or 1,121.12 points, in its worst one-day percentage loss since Feb 6. The index ended at 22,301.64.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, fell 6.1 percent, or 783.29 points, to 12,094.06.
"There are a couple of factors: there was no follow-through buying in the U.S. after the initial euphoria with the Fed move and the old concerns have returned -- recession, subprime and all the rest," said Societe Generale's Clarke. "There's also concern that China may tighten with inflation going through the roof."
China Railway's debut helped to drive mainboard turnover to HK$106.8 billion (US$7.6 billion), the highest level since early February.
Oil refiner Sinopec Corpwas among the worst performing blue chips as runaway crude prices weighed, finishing down 8.4 percent at HK$7.
Investors feared Sinopec's refining margins would erode all the while obeying a government price freeze on refined oil products when oil hovered near a record above $110 a barrel.
Transport stocks were also hit by high oil prices. China Southern Airlinesplunged 9.7 percent to HK$6.23. Hong Kong flagship carrier Cathay Pacific Airways tumbled 4.5 percent to HK$15, having earlier tapping 1-½ year lows.
The prospect of further monetary tightening weighed on mainland financials. China Life, the country's top life insurer, dropped 6.3 percent to HK$27.65 and China Construction Bank shed 6.1 percent to HK$5.38. (US$1=HK$7.8) (Editing by Anne Marie Roantree)
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