Most insurance stocks end lower on profit-taking; ICICI Lombard climbs over 2 pc

New Delhi, Sep 4 (PTI) Majority of insurance stocks ended lower on Thursday on profit-taking after rallying earlier in the day.

Announcing the outcome of the 56th GST Council meeting, Finance Minister Nirmala Sitharaman on Wednesday said all individual life insurance policies, whether term life, ULIP or endowment policies and subsequent reinsurance are exempt from GST.

At close of trade, shares of Max Financial Services slipped 3.11 per cent, Niva Bupa Health Insurance Company dropped 3.02 per cent, HDFC Life Insurance Company fell by 2.95 per cent, Star Health and Allied Insurance Company declined 1.76 per cent, ICICI Prudential Life Insurance Company went lower by 1.56 per cent and SBI Life Insurance Company dipped 0.95 per cent on the BSE.

However, ICICI Lombard General Insurance Company ended 2.42 per cent higher and Life Insurance Corporation of India climbed 0.78 per cent.

"Benchmark indices experienced a choppy trading session on Thursday, ultimately ending with marginal gains. The Nifty-50 kicked off on a firm footing, buoyed by broad-based optimism following sweeping GST reforms, which were perceived as a significant structural tax overhaul.

"The initial up move was driven by robust buying interest in auto and consumer staples. However, as the session progressed, profit-booking at higher levels and underperformance in select index heavyweights capped the upside," according to Bajaj Broking.

Earlier in the day, Star Health jumped 9.35 per cent, Niva Bupa surged 9 per cent, ICICI Prudential edged higher by 5.70 per cent, LIC rallied 5 per cent, and HDFC Life climbed 4.90 per cent.

"While the direct beneficiaries include consumer, auto, cement, healthcare and insurance sectors, the second-order beneficiaries in terms of growth will be retail banks & NBFCs," Rahul Singh, CIO - Equities at Tata Asset Management, said.

Since its inception in July 2017, GST at the rate of 18 per cent has been levied on premiums paid towards health insurance and life insurance.

"We will make sure that companies pass on the GST rate reduction and make insurance affordable for the common man and increase the insurance coverage in the country," she said.

She further said the new rates would be effective from September 22, the first day of Navratri.

"Some of the key sectors that stand to benefit from this are insurance, FMCG, automobiles, agriculture equipment, cement, consumer durables, apparel, footwear, QSR, and retail," Pranav Haridasan, MD and CEO of Axis Securities, said. PTI SUM SUM SHW SHW