Indian Stock Market Rocked in 2009

The Indian stock markets clocked their best-ever annual performance in 2009. The benchmark Bombay Stock Exchange Sensitive Index, or the BSE Sensex, logged an 81.03 per cent rise, the fourth best globally. Only Sri Lanka (125 per cent), Indonesia’s Jakarta Composite (87 per cent) and Brazil’s Bovespa (82 per cent) fared better. The Sensex just managed to pip the Shanghai Composite Index, which rose 80 per cent. For the Sensex, which rose 7,817 points to close at 17,465, the previous high in terms of returns was in 2003

The National Stock Exchange’s Nifty also had a record year. It rose 75.76 per cent, or 2,242 points, to close at 5,201.

On the last day of the year, the markets closed at their highest in nearly 20 months. The surge, which began in March, marked a turnaround from a record fall of 52 per cent in 2008.

The rise was driven by portfolio inflows, estimated at $17.46 billion during 2009, just $320 million short of the 2007 record of $17.78 billion.

The sentiments of foreign institutional investors were buoyed after the election verdict in May. Even deficient rains did not deter investors searching for higher yields in a world where liquidity was not an issue