Banking, Insurance Stocks Surge As FDI Limits Increase


NEW DELHI: Insurance and banking stocks surged as the cabinet approved a proposal to increase foreign direct investment (FDI) limit in the insurance sector to 49 percent from the current 26 percent.

The banking index at the Bombay Stock Exchange (BSE) rose by 74.64 points or 0.42 percent around 2.45 p.m.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,188.50 points, was trading at 26,256.69 points (at 2.45 p.m.), up 109.36 points or 0.42 percent from the previous day's close at 26,147.33 points.

Prominent financial companies which posted gains included Financial Tech, up 10.00 percent at 365.75; Reliance Capital, up 3.86 percent at 612.80; Bank of India, up 3.76 percent at 298; Uco Bank, up 3.24 percent at 105.30; and Bajaj Finance, up 2.37 percent at 2,290.

Other gainers included Bank of Baroda, up 2.17 percent at 872.50; Yes Bank, up 1.26 percent at 543.40; Andhra Bank, up 1.11 percent at 86.55; Union Bank, up 0.92 percent at 198.10; HDFC Bank, up 0.83 percent at 842.85; Punjab National Bank (PNB) up 0.77 percent at 926.55; IDBI Bank, up 0.70 percent at 93.00; and State Bank of India (SBI) 0.52 percent at 2,553.50

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi okayed the proposal for the hike but maintains Indian management control.

A senior government official who did not want to be named said the overseas investments in the insurance sector would be allowed through the Foreign Investment Promotion Board (FIPB) route.

In the budget for 2014-15 presented earlier this month, Finance Minister Arun Jaitley proposed to hike the overseas investment limit in the insurance sector to 49 percent.

Source: PTI