GST status quo disappoints traders, insurance bulls run for cover
Traders reduced their bullish bets on insurers after the GST Council left rates on insurance products unchanged. HDFC Life, ICICI Prudential Life, and ICICI Lombard saw declines. The industry is lobbying for a rate cut from 18% to 12%. A group of ministers will review the proposal before the next meeting in November.
Traders cut their bullish bets on insurers on Tuesday after the Goods and Services Tax Council at a meeting on Monday left GST rates on insurance products unchanged. HDFC Life fell 4.4% to Rs.703.40, ICICI Prudential Life declined 1.5% to Rs.746.50 and ICICI Lombard General Insurance dropped 2.7% to Rs.2,172.
"There was profit booking because the market had earlier expected the proposal of GST reduction on term insurance and health insurance to be approved in Monday's GST Council meeting," said Rahul Malani, equity research analyst at Sharekhan. "However, the proposal has been deferred, which was not along expected lines."
