Latest version of Instagram now allows users reply to stories with a photo or video. The feature also lets you use a new sticker that actually contains the original Story you’re replying to, which can be resized and positioned anywhere in your frame.
To reply with a photo or a video, tap the new camera button while you’re watching a story.
The updates are available as part of Instagram version 10.28 and above for iOS in the Apple App Store and for Android in Google Play.
http://blog.instagram.com/post/162670143702/170706-photoandvideoreplies