According to an analysis by MSCI Barra indices, a measure of returns from various stock markets across the world for foreign investors, the Indian stocks have given 100.50 per cent returns as compared to just 58 per cent provided by the Chinese stocks in 2009.
Among the emerging BRIC (Brazil, Russia, India and China) nations, the Indian stocks gave the second highest returns after Brazilian shares, which gained 121 per cent in the past year.
While, Russian stocks also performed quite well with 100.3 per cent return for investors, as per the analysis of performances of Morgan Stanley Composite Indices for various nations.
The 30-share benchmark index of Indian stocks, the Sensex, gained over 7,800 points in the past year to settle at 17,464.81 on December 31, 2009.
Indian stocks have even outperformed the MSCI Barra's emerging market index's, which includes all the developing world markets gain of 74.5 per cent in 2009.
Among the developed world markets, most of them pulled out the woods by the end of 2009, but could not give outstanding gains like the emerging markets.
The US stocks ended the year with 24.2 per cent returns for investors, while Japanese stocks gained just 4.4 per cent.
European markets like Norway and Sweden performed significantly well with 82 per cent and 60 per cent gain, respectively in 2009.
Besides, the Indian equities also came second in terms of yearly returns as compared to its peers in the emerging Asian countries with Indonesia topping the pack with 120 per cent gain in the 12-month period.
According to an annualised historical return analysis, Indian equities have provided returns of just 6.24 per cent in the past three years and close to 20 per cent while taking into account the last five years and 12 per cent in the 10 years period.
The sharp revival in the Indian stocks have also attracted foreign investors to flock back again in the world's second fastest growing economy in the past year.
Foreign Institutional Investors (FIIs) have bought Indian equities worth a whopping over Rs 80,000 crore in 2009 after their flight away from the market in the previous year.