Nevertheless, the price movement has been in tandem with the quarterly financial results declared by banks. Interestingly, this is, more or less, in contrast to sectors like information technology and telecommunications, where the markets have shown no response to the brilliant financial performance in most of the companies.

As many as four public sector banks and three private sector banks have posted impressive gains. Global Trust Bank topped the list of gainers which zoomed by 42.12 per cent thanks to excellent financial results during the quarter ended September 2000. The bank's net profit shot up by 76 per cent and operating profit margin (OPM) improved by 83 per cent. Interestingly, the top five performing banks from the public sector are from the A group, while the private sector banks in the A group are nowhere near the top gainers.

In fact, ICICI Bank, a private sector bank in the A group, saw decline in market prices, over its October-18 level. This is mainly because of the plans of its parent company, ICICI, to merge ICIC Bank with itself.

Marketmen feel that the merger may turnout to be a raw deal for them. IDBI Bank and Dena Bank were the other two losers in the sector, while Dhanalakshmi Bank and Federal Bank recorded double digit gains from the private sector. Both these private banks had achieved brilliant growth rates. While the former showed a 290 per cent spurt in net profit, the latter's net profits grew by 235 per cent.

Operating profit margins of both these private banks improved by 74 per cent. Even as the banking sector has gained by about 10 per cent over its October-18 close, the rise has been restricted to a select few since investors have resorted to value buying at lower levels.

Many of the stocks in this sector have for long been trading below their IPO prices. This under-performance of stocks is one of the reasons for lack of investor interest, coupled with other ailments like NPAs, low efficiencies and lack of technology upgradation. In many of these banks, investors are still waiting for an exit route as prices have never touched their IPO prices. Some such stocks include State Bank of Travancore, State Bank of Bikaner and Jaipur, Dena Bank, City Union Bank and J&K Bank. Some others that are trading below their offer prices include IndusInd Bank, Bank of India, Bank of Baroda and Corporation Bank.

The future, too, may not hold much promise for such under-performing stocks. This is evident from the fact that most of the public sector banks, except for Vijaya Bank, have post-poned their public offers citing bearish market conditions.