HK shrs sink on tightening fears; China Railway up

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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 1186.HK, 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 Index .HSI closed 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 .HSCE, 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 Corp 0386.HK was 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 Airlines 1055.HK plunged 9.7 percent to HK$6.23. Hong
Kong flagship carrier Cathay Pacific Airways 0293.HK 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 2628.HK, the country's top life
insurer, dropped 6.3 percent to HK$27.65 and China Construction
Bank 0939.HK shed 6.1 percent to HK$5.38.
 (US$1=HK$7.8)
 (Editing by Anne Marie Roantree)