Insurance stocks gain after parliament passes bill to hike FII limit

Mumbai: Shares in insurance companies surged on Friday after parliament passed a bill proposing to increase overseas investment limit in the sector. Max India gained 4.8 per cent, Reliance Capital added 3.9 per cent while Exide Industries surged 2.7 per cent.

Lawmakers in the Rajya Sabha agreed to increase the foreign investment limit in insurers firms to 49 per cent from 26 per cent after the opposition Congress party supported the bill that was cleared by the Lok Sabha last week.

Following this, shares of Max India Ltd jumped 6.71 per cent, Bajaj Finserv soared 6.41 per cent, Reliance Capital rose 5.11 per cent and Aditya Birla Nuvo was up 2.24 per cent on the BSE. These stocks had gained up to 11 per cent yesterday. Parliament last night passed Prime Minister Narendra Modi-led NDA government's first major economic reform measure as the long-pending Insurance Laws (Amendment) Bill, 2015, providing for raising foreign investment cap in the sector to 49 per cent was passed by Rajya Sabha after main opposition party (Congress) and some other parties came on board.

The bill, which was passed by Lok Sabha on March 4, provides for raising the foreign investment cap in insurance sector from 26 per cent to 49 per cent and is expected to bring in funds worth thousands of crores into the sector.