Insurance stocks gain as Cabinet approves 49% FDI in insurance

Max India, Reliance Capital and Bajaj Finserv were up 3-5% on the Bombay Stock Exchange.

Max India, Reliance Capital and Bajaj Finserv have moved higher between 3-5% on BSE, after media reports that the Union Cabinet approved raising the foreign direct investment (FDI) cap in the insurance sector to 49% from the existing 26%.

Reliance Capital and Max India rallied 5% each at Rs 622 and Rs 335 respectively, while Bajaj Finserv up 3% at Rs 606 on BSE.

Presenting the Budget for 2014-15 earlier this month, Finance Minister Arun Jaitley proposed raising the FDI cap from 26 % to 49 % in the insurance sector.

The government's move to increase FDI limit will benefit private sector insurance companies, which require a huge amount of capital.