Surging ahead despite all the odds in 2010, when there were numerous scams, global cues were not good, inflation and interest rates continued to play spoilsport, the stock market managed to register decent gains with over 17 per cent rally of over 3,000 points in the Sensex and over Rs 12,00,000 crore rise in investor wealth.
During 2010, investors' total wealth, measured in terms of cumulative market capitalisation of all listed companies, rose to Rs 72,96,725.14 crore, from Rs 60,79,000 crore at the end of 2009. The Sensex rose from 17,464.81 points on December 31, 2009, to 20,509.09 points at the end of 2010.
Market experts expect that its going to get even better in 2011 and the Sensex will break all its previous records to surge past 24,000-point level.
They also expect the rally to get more widespread as compared to 2010, when growth was mostly limited to auto, banking, pharma and IT sector stocks.
"With GDP growth close to nine per cent in 2010, the key index Sensex is likely to hit at least 24,000 next year despite the rising inflation," Globe Capital PMS Head KK Mittal said.
Equity broking and portfolio management advisor firm Convexity Solutions' MD & CEO Sudip Bandyopadhyay also forecast robust growth ahead for the country's economy and markets, but also put forth a word of caution.
"2011 will be the make or break year for India. 2011 will present the opportunity for India to cross China in terms of GDP growth rate for the first time since liberalisation began.
It also poses the possible threat of India loosing its stream midway by getting bogged down with silly corruption issues along with non-functional governance," he said.
During the last year, the market rose on the back of improved global environment and highest levels of net FII inflows and continued momentum of FDI inflows, all of which improved liquidity in 2010.
IDBI Federal Life Insurance's Chief Investment Officer Aneesh Srivastava said given the strong global liquidity and India's high GDP growth rate, Indian stock markets would attract global liquidity and scale new highs in 2011.
Besides, market analysts emphasised that the street is looking forward to a good performance by the corporates in the third quarter results to be announced in January.
"The first quarter of 2011 would start with third quarter results and would face events like Budget in the latter part. We expect better allocations towards India from foreign institutions based on India growth story," Unicon Securities Vice-President Research Madhumita Ghosh said.
However, experts cautioned that pressure in the form of higher inflation and interest rates may act as spoilsport.
Also currency appreciation is expected with increased inflow and recovery. The past year saw the Sensex hitting its record closing level of 21004.96 points on Diwali day, November 5. However, the index could not surpass its highest intra-day level of 21,206.77 points, scaled on February 10, 2008.
While the performance of the country's most valued firm Reliance Industries was not up to the mark, a number of other blue-chips, mostly from auto, banking, pharma and IT space, performed well.
Some of the key stocks that gave impressive returns to investors included Bajaj Auto, Tata Motors, TCS, Hindalco, M&M, ICICI Bank, HDFC Bank and SBI.
Those with negative returns for the year included RIL, Maruti, NTPC, DLF, RCOM and SAIL.
Realty counters got badly hammered during the year on the negative news flow, with the sector emerging as the worst performer among the 13 sectoral indices.
Besides, the telecom sector was hit by the 2G spectrum scam and subsequent investigations. Experts said the sector is likely to get a boost only with the successful roll out of 3G services.
Despite all the ups and downs during the year 2010, India's stock market was among the best performing stock markets in the world and the experts expect the things to get only better in 2011.