Year 2009 turned out awesome for Dalal Street as punters saw wealth doubling to

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over Rs 60,00,000 crore as foreign investors parked their faith as well as money in the world's second fastest growing economy.

It ended the year at 17,464.81 points, up 7,817.50 points (81 per cent) from the year ago level. It was up 120.99 points over yesterday's close, mainly driven by market leader Reliance Industries and IT major Infosys.

Starting on a slow note, the stock market was hit by a purple patch with the re-election of the UPA government in May and shares gained in leaps and bound from thereon.

Market analysts predict the rally in stock market would continue in the 2010 with the benchmark index Sensex expected to scale back its record 21,000 level by the end of the New Year.

"Today, India is a preferred destination for equity investors across the world as is evident from the FII and FDI inflows (USD 35 billion) into the market this year," ICICI Securities chief Madhabi Puri Buch said, adding that the strong flows were expected to continue in the new year.

Analysts too are optimistic about the gradual return of stock prices to the January 2008 level (21,000 points) once the 17,500 resistance is breached with high volume. The market had reached its record high of 21,206.77 on January 10, 2008.

"This year is a historical one by any standard and we haven't seen stock market doubling in so short span of time nor have we seen the stock market recovering so sharply right after a serious almost 65 per cent fall from the top and wiping out a major chunk of the losses in just nine months time frame," Ashika Stock Brokers' Research Head Paras Bothra said.

The stocks mostly derived strength from the government's fiscal packages announced over since October 2008 and through the early parts of 2009 and sustained capital inflows. India recorded 7 per cent growth in the first half of this fiscal, thanks to increased manufacturing activity. Foreign Institutional Investors (FIIs) have bought shares worth over Rs 80,000 crore - a record high.

However, a possible dampener could be a hike in interest rates by RBI, which is meeting in January to review its monetary policy stance.

HDFC Securities Head (Private Broking and Wealth Management) Vinod Sharma said, "The year 2009, as a whole has been a year of education ... It has taught the investors to buy when a great sale is on and sell when the profits are there for the taking.

Not every investor has actually bought at lower levels. It also bestowed on the participants huge profits, which will shore up their risk taking ability going forward."

During the year, the market grew by a whopping more than 80 per cent and many investors even saw multiplying of the worth of their portfolios.

In absolute terms, the total investor wealth – measured in terms of the cumulative market capitalisation of all the listed companies – nearly doubled from about Rs 31,00,000 crore at the beginning of the year to more than Rs 60,00,000 crore as 2009 came to an end.

The market regulator Sebi also focused its attention on the stock market space this year, as it relaxed norms for trading timings for exchanges to bring the country's bourses at par with global ones.

Following this, the country's two premier bourses have advanced the trade timings by nearly one hour to help catch up with trading in Hong Kong and Singapore markets and pep up trading volumes. With effect from January 4, the National Stock Exchange and Bombay Stock Exchange would advance the trade timing to nine am as against current opening time of 9.55 am. The market closing time would remain same at 3.30 pm.

However, the move has received mixed views from the market players with some marketmen believing extension in timings would help in reducing volatility, improve trading volumes and help catch up with trading in Hong Kong and Singapore markets, while some think the move may be a futile exercise.

During the year, the stock market’s benchmark index Bombay Stock Exchange Sensex grew by about 80 per cent and was seen trading at near its highest level for the year, that is near 17,500-points level. Besides, the index is being seen fast approaching towards its all-time peak of 21,206.77 points, which was scaled almost two years ago on January 10, 2008.

If we compare the performance with the lowest level of the market, the recovery is even sharper. The Sensex had slipped to as low as 8,047.17 points on March 6, 2009, and more than doubled from this level as the year drew to its close.

Similarly, the National Stock Exchange's Nifty index, another benchmark index, surged to its highest level of the year at near 5,200 points – representing an over two-fold surge from the lowest level of the year at 2,539.45 points that was hit in initial months of 2009. It's also fast approaching towards its all-time peak of 6,357.10 points, which was scaled in January 2008.

Moreover, the stock market got a renewed lease of life as foreign institutional investors, which had fled from the emerging markets in the 2008, started to look again towards Indian equities as valuations turned attractive.

The FII investment hit a record level of over Rs 80,500 crore in 2009 -- the highest ever inflow in the country in rupee terms in a single year. FII inflow so far this year has broken the previous high of Rs 71,486 crore parked by foreign fund houses in domestic equities in 2007.

Market analysts believe that the FII inflow in India may continue in the next year as well, if the liquidity conditions remain strong.