China's main stock index ended up 0.33 percent on Wednesday, buoyed by strong real estate and bank stocks, but investors remained worried that imminent initial public offerings may swamp the market with fresh supplies of shares.

China's Western Mining Co. Ltd. said on Wednesday it would list its shares on the Shanghai Stock Exchange on Thursday after an $816 million initial public equity offer.

Bank of Nanjing and Bank of Ningbo announced price ranges on Wednesday for their initial public equity offers, set to raise a combined total of up to 11.07 billion yuan ($1.46 billion).

The Shanghai Composite Index ended at 3,865.723 points, reversing a fall of as much as 1 percent during the afternoon and a 0.78 percent drop on Tuesday.

Analysts predicted the market would fluctuate moderately around the current level, as investor enthusiasm and speculation seen during recent rallies had cooled.

The market will continue to move between the 3,500 and 4,000 levels in the short term. We do not expect the index to be as volatile as it was last month, said Zheng Weigang, analyst at Shanghai Securities.

Gaining Shanghai stocks outnumbered losers by 639 to 229, reversing the morning's losing trend.

Wednesday's turnover in Shanghai A shares, the lowest in five months, was at 61.6 billion yuan ($8.1 billion), down significantly from Tuesday's already thin 92.8 billion yuan.

Today's low turnover suggests that investor confidence was weak because of the IPO news, said Li Wenhui, analyst at Huatai Securities.

The low turnover, at less than one-third levels seen in May and June, may also indicate investors have become less active due to concerns that the government's tightening policies may divert money from the markets.

INTEREST RATE WATCH

A report published in the official Shanghai Securities News on Wednesday said the central bank may raise interest rates as early as this month.

Analysts added that, before touching the interest rate, the government was likely to reduce the tax on interest income from bank deposits, although this was not expected to hurt stock prices.

A tax on interest income should not affect the market too much, as it largely digested this news last month, added Li.

The real estate sector outperformed the index as the yuan strengthened to a post-revaluation high for a second day in a row. A strong yuan exchange rate increases property values.

Poly Real Estate Group Co. rose 3.16 percent to 49.64 yuan and Winsan Industrial Corp. rose its 10 percent daily limit to 6.99 yuan.

Banks continued Tuesday's surge as many were forecasting strong profits for the first half of 2007.

Industrial and Commercial Bank of China, the benchmark index's most active share, extended the previous day's rise, up 0.75 percent at 5.40 yuan, on news released late on Monday that it expected more than 50 percent growth in its first-half net profit.

Heavily weighted Bank of Communications gave the index its biggest boost, climbing 0.45 percent to 11.08 yuan.

Industry sources said more banks were expected to issue strong earnings estimates in the next few days. Chinese listed companies are required to issue announcements if they expect their profit to grow by more than 50 percent.

Aluminum Corp. of China Ltd. fell 2.42 percent to 20.58 yuan.

($1 = 7.59 yuan)

China Investment