Sensex Bounces Back 1600 Points After Thursday's Carnage, Tata Motors Leads

Benchmark indices gained ground on Friday, a day after the Nifty and the Sensex plunged almost 5%, following a Russian invasion of Ukraine.

In today's trade the Sensex surged almost 1600 points, while the Nifty gained 490 points in trade. The reasons for the gains could be the sharp reversal seen in the US markets on Thursday, with the Dow Jones ending higher after having dropped nearly 2% in trade.

However, analysts caution against buying on rallies, as tensions on the Russia Ukraine front could mount, once again putting stocks at risk.

Among the gainers in trade today were some of the beaten down names from Thursday like Tata Motors, which rallied 7% and Adani ports, which gained 6%. Meanwhile, Asian markets staged a comeback as well with the Japanese Nikkei and the Hong Kong's Hang Sang higher in trade.

Rahul Shah,Co-Head of Research at Equitymaster, believes that the markets are still expensive and exuberance of going out and buying should be avoided.

"The Russian invasion was certainly a bolt from the blue for the markets. The fact that the Indian stocks were not cheap based on historical valuations did not help matters either.

Having said that, the key benchmark indices are still expensive. Any exuberance of going all out and buying the dip should therefore be controlled. In fact, if you are still holding on to fundamentally weak stocks that had gone up merely on hope, it may still not be a bad time to get rid of them. For those invested in quality stocks however, should stay put as the long-term India growth story is intact."