Will one-licence regime revive trend in insurance stocks? Chart check here

Among individual stocks, even as SBI Life trades record high the stock has been unable to enter unchartered territory. The proposed changes to the sector may help revive sentiment going forward.

The insurance sector seems set for a major revamp with likelihood of a single licence for all products, and permission to cross-sell other financial instruments.

The finance ministry has proposed a host of amendments to the insurance laws — from granting insurers a composite licence to allowing them to sell different financial products, and increasing the retirement age of the chairman and whole-time members of the Insurance Regulatory and Development Authority of India (Irdai). READ MORE

An amendment to issue one composite licence for insurance companies to operate in multiple businesses would certainly act as a major booster for the industry. Presently, when an insurance company wants to bring multiple segments such as general, life and health insurance under one roof, the company needs to apply for individual licence separately. 

The said proposal also intends to let insurers market other financial products like mutual funds. That apart, it proposes to elevate the retirement age of whole-time directors and chairman to 65 years from 62 years.

On Friday, in an otherwise weak market, most of the insurance stocks traded flat. The benchmark indices - the Sensex and Nifty were down more than half a per centage each. Among the Nifty 50, as many as 41 stocks traded with a negative bias, while only 9 stocks managed to stay afloat in green.
 

Amid this backdrop, here's how the listing insurance stocks look on charts:-
 

Life Insurance Corporation of India (LICI)

Outlook: Trend continues to remain sluggish

Since the day of its listing in May this year, the stock has remained an underperformer and declined 25 per cent post listing and 32 per cent from the IPO issue price. The trend continues to remain sluggish, with a loss of intered by market participants towards the counter.

While the current chart formation resembles an “Inverse head and Shoulder Pattern”, the underlying momentum has not picked up yet. Support for the stock emerges at Rs 615 mark, which persists to bolster a positive bias. A breakout above Rs 680 could mean an upside to Rs 725, its key hurdle since June 2022. CLICK HERE FOR THE CHART

HDFC Life Insurance Company Ltd (HDFCLIFE)

Outlook: Breakout over Rs 610

The major breakout for HDFC Life Insurance Company shares is anticipated to occur above Rs 610 level, which the stock is tussling to surpass since June this year. As and when this happens, the bullish bias could trigger as upside to Rs 675 mark. Amid the current trend, support for the stock is seen at Rs 580 and Rs 560 levels. CLICK HERE FOR THE CHART

ICICI Prudential Life Insurance Company Ltd (ICICIPRULI)  

Outlook: Weak beneath Rs 500

Shares of ICICI Prudential Life Insurance Company breached major bullish bias of “Rising Channel pattern” last month, leading to a decline fostering more bearish bias. The stock is expected to remain under pressure beneath the Rs 500 mark, shows the weekly chart shows. It would be better to stay aside till clear direction is formulated at this counter. CLICK HERE FOR THE CHART

SBI Life Insurance Company Limited (SBILIFE)

Outlook: Move Rs 1,300 could result in some respite

While shares of SBI Life Insurance Company are broadly trading closer to the all-time high of Rs 1,340, the trend has been robust, with the stock unable to enter newer territory. The immediate support for the stock exists at Rs 1,200 level, with a close above Rs 1,300 likely to trgger a jump towards Rs 1,340. CLICK HERE FOR THE CHART

Star Health and Allied Insrnce Com Ltd (STARHEALTH)

Outlook: Bullish trend only over Rs 790 mark

The daily chart shows presence of a major hurdle at Rs 790 and until this barrier is taken off, the trend would continue to remain subdued. Immediate resistance for the stock is seen at Rs 680 level. A breach of Rs 600 could see more weakness towards Rs 550 mark. CLICK HERE FOR THE CHART