Shares of General Insurance Corporation of India Ltd (GIC) surged more than 9 percent in early trade on Thursday and surpassed their 52-week high from Wednesday, setting a new record.
At 12:04 pm, the stock was trading 8.80 percent higher at ₹173.70 per share on the BSE. The stock has seen strong traction in the last two days, up by 20 percent during the period.
The insurance space has been making headlines with the government proposing to allow composite insurers. According to reports, experts are of the view that the four public sector general insurance companies can be merged with the Life Insurance Corporation.
“Entire insurance sector is buzzing these days and gearing up its momentum on the upside trend, after consistent underperformance in the last few quarters," said Prashanth Tapse, research analyst, Senior VP - Research, Mehta Equities Ltd.
“Industry experts assume companies like General Insurance Corporation of India (GIC Re), The Oriental Insurance Company Ltd, National Insurance Company Ltd, The New India Assurance Company Ltd, and United India Insurance Company Ltd are in news of merger of the companies into one or two strong entities,” added Prashanth.
GIC on Thursday was trading at high volumes of 7.9 million.
The stock has gained 66.24 percent from its 52-week low of ₹105.0 level seen on June 14. Over a period of six months, the stock has gained 53.65 percent.
According to analysts, further upside is expected towards the ₹182-185 level, with immediate support at the ₹163 level.
"Technically, after breaking a key resistance, the momentum is seen with great volume," an analyst said.
According to Mintgenie poll, four analysts recommend 'buy' rating for the stock.