Equity Alert: ICICI Bk up on slowing inflation; analysts cautious

[K.Karthik Raja]

Equity Alert: ICICI Bk up on slowing inflation; analysts cautious
MUMBAI--1:15PM--ICICI Bank shares were up nearly 9% at 600.55
rupees after weaker-than-expected inflation data led to short covering
amid expectations Reserve Bank of India may refrain from raising
interest rates.
Headline inflation for the week ended Jul 5 was 11.91%, lower than
expectations of 12.05%.
Bank and other rate-sensitive shares had come in for selling
recently after the central bank began a series of rate hikes to combat
inflation, which is at a 13-year high.
However, analysts are cautious about ICICI's prospects. The bank's
net interest margins are likely to remain under pressure due to an
expected rise in non-performing assets, said Ajay Parmar
Also, slower credit growth implies a negative outlook in the near-
term, he said.
Parmar has a "buy" rating on the stock due to attractive
valuations and expects earnings per share of 38.50 rupees for Apr-Jun.
The stock has support at 565 rupees and then at 560 rupees, while
resistance is at 620 rupees,