Insurance shares extend gain on Cabinet nod for hike in FDI cap

Max India, Aditya Birla Nuvo, Reliance Capital and Bajaj Finserv are up 3-7% in opening trades on the BSE.

Shares of companies engaged in insurance business such as Aditya Birla Nuvo, Max India, Reliance Capital and Bajaj Finserv have extending their previous day’s and trading higher up to 7% after the Cabinet on Thursday granted approval for increase of foreign direct investment (FDI) limit in the insurance sector from the present 26% to 49%.

‘It has been a long pending step in the right direction to boost the confidence of the global insurers and investors. The insurance industry has been struggling for a while on capital, which will be now be forth coming. There should also be more product and channel innovation with increase in completion expected,” said Shashwat Sharma – Partner, KPMG India.

Among the individual stocks, Max India has rallied 7% to Rs 247 in opening deals on the Bombay Stock Exchange. Aditya Birla Nuvo and Reliance Capital are up by around 4% each at Rs 984 and Rs 473 respectively, while Bajaj Finserv by 3% at Rs 979.