Shares of two state-owned general insurance companies -- General Insurance Corporation of India and The New India Assurance Company Ltd -- rose sharply in late deals on Thursday. General Insurance Corporation's stock jumped 18.94 per cent to hit a day high of Rs 185.60 over its previous close of Rs 154.70. The counter was witnessing heavy trading volumes today. Around 11.25 lakh shares were last seen changing hands today on BSE, which was 45 times higher compared to the two-week average volume of 25,000 shares. Turnover on the counter stood at Rs 19.96 crore, commanding a market capitalisation (m-cap) of Rs 32,561.66 crore. A couple of days back, the general insurance company informed the exchanges that Inderjeet Singh has retired as General Manager and Director on May 2.
In the case of New India Assurance, the stock surged 17.86 per cent to touch Rs 129.70 against a previous close of Rs 110.05. A total of 12.10 lakh shares were seen changing hands, which was more than 32 times compared to the two-week average volume of 37,000 shares. Turnover on the counter came at Rs 14.79 crore with a m-cap of Rs 20,237.44 crore. Last month, CRISIL assigned its Corporate Credit Rating (CCR) of 'CCR AAA/Stable' to New India Assurance. "Issuers with this rating are considered to have the highest degree of safety regarding timely servicing of debt obligations. Debt exposures to such issuers carry lowest credit risk," CRISIL stated.
"Expectation of better Q4 FY23 results as it has been seen in other insurance companies could be leading to this strong uptrend in these two stocks," said AR Ramachandran from Tips2trades said. Some of the insurance companies have posted decent March 2023 quarter earnings.
For General Insurance, Ramachandran said, "Technically, the stock is very bullish but also overbought on the daily charts with strong resistance at Rs 186. Investors should book profits at current levels as a correction near the support zone of Rs 145-149 looks likely in the near term."
The counter was last seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 82.62. A level below 30 is defined as oversold while a value above 70 is considered overbought.
Ramachandran said that the New India Assurance's counter also looked bullish and overbought on the daily charts with strong resistance at Rs 126. Investors should book profits at current levels as a correction near the support zone of Rs 98-101 may happen in the near term, he suggested.
New India was also seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day RSI came at 80.62.
Meanwhile, Indian equity benchmarks traded higher today, led by strong buying in financials, banks and metal stocks.
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