Sinopec Engineering made a lackluster market debut on Thursday after raising $1.8 billion in Hong Kong's biggest IPO this year, casting doubt on a nascent recovery in IPO issuance in the city as investors remained cautious because of a weaker local stock market.

The IPO by Sinopec Engineering (Group) Co Ltd, a unit of China's largest refiner, was closely watched by other companies planning to tap capital markets.

But Sinopec Engineering shares fell to HK$10.46 in early afternoon trade compared with the IPO price of HK$10.50, after opening higher at HK$10.70. The deal was priced near the bottom of an indicative range of HK$9.80-HK$13.10 per share last week.