LIC shares surge 7% to hit one-year high; key technical levels to watch

Shares of Life Insurance Corporation of India (LIC) rose sharply in Friday's trade to scale their one-year high level. The stock jumped 7.26 per cent to hit a 52-week high of Rs 820.05. The scrip has climbed around 14 per cent in 2023 and 26 per cent in the last six months.

Today's sharp rise in the share price came after the state-run insurer said it has received a one-time exemption to achieve 25 per cent minimum public shareholding (MPS) norms within 10 years from the date of listing, i.e., till May 2032.

"The decision of allowing LIC a time period of 10 years to achieve MPS is a welcome step. Stake sale in LIC would have released a supply of around 40 crore shares of in the market. This might have affected the share price. This step would act as a breather for LIC investors, which is already trading below the IPO (initial public offering) price," said Makarand M Joshi, Founder of MMJC & Associates. For the unversed, LIC's IPO price was fixed at Rs 949.

Technical analysts suggested that the stock looked 'strong'. Although, one of them pointed out that it looked overbought.

"The counter looks poised to continue its upward march in the comparable period. A sustainable buying beyond Rs 820 is likely to trigger a fresh round of rallies. On the downside, Rs 760-750 is likely to act as a strong support zone," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"The stock is looking strong. One can expect a near-term target of Rs 850, keeping a stop loss placed at Rs 780," said DRS Finvest founder Ravi Singh.

"LIC looks bullish but also overbought and a daily close above strong resistance of Rs 824 could lead to Rs 880 in the near term. Strong support will be at Rs 794. Investors should be cautious in their buy positions at current levels," said AR Ramachandran from Tips2trades.

"Support will be at Rs 770 and resistance at Rs 825 level. Expected trading range will be between Rs 750 and Rs 900 for a month," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

For the September quarter, LIC reported a 19 per cent decline in net premium income at Rs 1.07 lakh crore compared with Rs 1.32 lakh crore in Q2 FY23. First-year premium for the reporting quarter increased to Rs 9,988 crore, as against Rs 9,125 crore in the year-ago period.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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