Analysts are however hesitant to conclude that the bounce back will be sustained with geopolitical tensions and concerns over higher US bond yields continuing to cast a shadow over the markets.
NSE's Nifty gained 190 points, or 1.01%, to close at 19,047.25. BSE's Sensex rose 634.65 points, or 1.01%, to end at 63,782.80.
«The market has recovered due to a technical pullback after it was in the oversold category for the last six trading sessions,» said Dharmesh Shah, head, technical, ICICI Securities.
«It is too early to say if it's a bottom-out level, but the pullback could continue till 19,400 levels.»
JP Morgan upgraded its rating on India to overweight, partly on the ground that the recent dip is an «opportunity to add and leverage on a positive historical seasonality to general elections». Foreign portfolio investors (FPIs) continued to sell Indian stocks, pulling Rs 1,500 crore out of equities.
These investors have dumped shares worth Rs 20,356 crore in October so far.
The stock market may see a few days of recovery before falling again, said Sandeep Raina, executive vice president, research, Nuvama Professional Clients Group.
«While it is not a panic situation, we may still witness high volatility, which can bring the Nifty down to 18,000 over 3-4 months,» said Raina. «But that downside will be very slow.»
Elsewhere in Asia, markets rose, bucking the overnight weakness on Wall Street.
China advanced 0.99%%, Hong Kong surged 2.08%, South Korea gained 0.16% and Taiwan rose 0.38%.
The S&P 500 was 0.48% lower as of 11:00 pm India Standard Time on Friday, coming off its ninth loss in 11 days and its lowest level in five months. The Dow Jones Industrial Average was down 310 points, or 0.95%, while the Nasdaq