Insurance stocks, Max India (up almost 4%), Bajaj Finserv (up 2.5%), Reliance Capital (up almost 4%) all spiked up into the green, the moment news came in that the Cabinet had approved, the much awaited 49% nod to FDI in insurance.

What this means is that approval, as it is now, will be automatic for up to 26% and that from 26% to 49% will necessarily still need to go through the FIPB approval. The relief is that this was expected since 2008 and it has finally come through. The cap would be composite, implying that it would include both FDI and FII investment. The caveat is that even after hike to 49%, management control will remain with Indian companies.