Thursday’s brutal sell off shook Dalal Street, but Friday brought a sharp reversal. The Sensex surged 879 points, while the Nifty climbed back above 22,500.

The rebound delivered immediate relief to investors who had watched benchmark indices sink to multi month lows. But the bigger question is whether this recovery can last.

The Sensex closed Friday at 72,472.33, gaining 879.09 points, or 1.23%. The Nifty 50 ended at 22,520.45, up 288.65 points, or 1.30%.

Thursday’s session had been far more damaging. The Sensex plunged 1,045 points to 71,593.24, while the Nifty dropped 371 points to 22,231.80.

The sell off erased around ₹10 lakh crore in investor wealth in a single session. Rising oil prices, global bond yields, rupee weakness and foreign investor selling combined to pressure equities.

Friday’s rebound therefore mattered beyond the headline numbers. It showed that buyers were willing to return after a steep decline, although one positive session cannot establish a lasting market bottom.

One major support came from information technology stocks. Investors responded positively to quarterly results from Tata Consultancy Services, helping lift sentiment across the sector.

TCS reported a year on year increase in net profit to ₹13,884 crore for the September quarter. The results provided investors with a fresh reason to reassess IT shares after recent market weakness.

The gains were not limited to one company. Buying in IT shares helped support the broader indices, with investors looking for opportunities in stocks that had come under pressure.

Another factor was a partial easing in crude oil prices. Lower oil prices can reduce concerns about India’s import bill, inflation and pressure on the rupee.

However, oil remained expensive by recent standards. Brent crude was still trading around the $103 per barrel area in early reports, leaving a significant risk for an oil importing economy such as India.

Geopolitical developments also helped sentiment. Reports that the United States would pause potential strikes against Iran reduced some immediate fears of further escalation in the Gulf region.

That matters because the Gulf region is central to global energy supplies. Any renewed disruption could push oil prices higher and quickly reverse the improvement in investor sentiment.

Global bond yields and currency movements were also closely watched. A softer dollar and some relief in bond yields helped create a more supportive backdrop for equities during Friday’s session.

Investors also appeared to engage in bargain hunting after the previous session’s sharp fall. When prices decline quickly, some traders buy stocks they believe have become attractive at lower valuations.

But bargain hunting is not the same as a confirmed change in trend. A sustainable recovery usually requires continued buying, improving earnings expectations and a more stable global environment.

Foreign investor activity remains an important concern. Foreign portfolio investors sold equities worth approximately ₹12,944 crore on Thursday, adding to the pressure on Indian shares.

Heavy foreign selling can limit the strength of a rebound, particularly when global investors are moving money toward other markets or safer assets. Friday’s gains do not by themselves prove that these outflows have reversed.

Domestic institutional buying can provide some support when foreign investors sell. Even so, the durability of that support depends on the scale of flows and the broader direction of market sentiment.

The recovery also came after an extended period of weakness. Reuters reported that Friday’s gains helped end the market’s longest weekly losing streak in 25 years, a reminder of how difficult the recent stretch had been for investors.

For traders, the Nifty’s move back above 22,500 is an important near term development. The market will need to sustain its gains and attract follow through buying before confidence in a stronger recovery can build.

For longer term investors, the immediate focus should not be on predicting the next single day move. Earnings performance, valuations, cash flows and the financial strength of individual companies remain more useful decision making factors.

The latest rally may create opportunities in fundamentally strong businesses whose share prices have fallen sharply. But investors should distinguish between a temporary price correction and a genuine deterioration in a company’s outlook.

High crude prices remain a key risk for India. Persistently expensive energy can increase costs for businesses, pressure household purchasing power and complicate the inflation outlook.

A weaker rupee can add to the burden by making imported energy and other commodities more expensive. Export oriented companies may benefit in some circumstances, but the impact varies by business and its foreign currency exposure.

Interest rate expectations also deserve attention. The Reserve Bank of India’s recent 25 basis point repo rate increase to 5.50% adds another factor for investors to consider when assessing borrowing costs and valuations.

Higher borrowing costs can affect rate sensitive sectors such as real estate, automobiles and some consumer businesses. Banks may experience different effects depending on their lending rates, deposit costs and asset quality.

The coming earnings season will be another major test. Strong results and constructive management commentary could help extend the recovery, while disappointing numbers may bring selling pressure back.

Investors should also monitor whether market participation broadens. A rally supported by several sectors is generally more reassuring than one driven by a small group of heavyweight stocks.

The key signals to watch now are crude oil prices, foreign investor flows, the rupee, global bond yields and the Nifty’s ability to hold above recently reclaimed levels. These factors could determine whether the rebound develops further or fades.

Friday’s recovery was a welcome break after Thursday’s crash, but it does not eliminate the risks that triggered the sell off. For now, Dalal Street has bounced back; the next challenge is proving that the rebound has staying power.