The Sensex may go down to 18,700 and the Nifty to 5,600. Also, watch if the indices trade above their previous day's high for a reversal

The market opened in the red, tracking a downward trend in the Asian markets and speculation that the country's industrial output data, which was to be released later in the day, would be lower-than-expected on rising costs. The Sensex, which lost 140 points on Friday, was 68 points down at the opening and the Nifty fell 37 points to 5,805. Auto, banking, realty and IT sectors witnessed selling pressure, dragging the market further southwards.

Weak Index of Industrial Production (IIP) numbers for February, announced before noon, resulted in a quick fall and the market remained range-bound thereafter. Under selling pressure from institutional investors, the market touched the low-point of the day towards the fag end of the session. The Sensex fell to 19,243 and the Nifty touched 5,778 at the intra-day lows. The market closed a tad above those levels with the Sensex at 19,263, down 189 points from Friday's close and the Nifty down 56 points at 5,786. The advance-decline ratio on the National Stock Exchange was 445:959.

With the market closed on Tuesday and again on Thursday on local holidays, investors will be cautious this week.

Among the broader indices, the BSE Mid-cap index was down 0.70% and the BSE Small-cap index declined 0.71%.

All but two sectoral gauges ended in the red today. BSE Realty (down 2.52%), BSE Auto (down 2.15%), BSE Consumer Durables (down 1.89%), BSE Oil & Gas (down 1.59%) and BSE Capital Goods (down 1.07%) were the top losers. BSE Healthcare (up 0.05%) and BSE Fast Moving Consumer Goods (up 0.02%) were the gainers.

On the Sensex, DLF (down 3.51%), Jindal Steel (down 3.01%), Jaiprakash Associates (down 2.96%), Tata Motors (down 2.84%) and HDFC (down 2.69%) were the top losers. On the other hand, Reliance Infrastructure (up 0.84), Cipla (up 0.63%) and ITC (up 0.46%) were noteworthy gainers.

Pinning his hopes on a smart recovery in farm output, Planning Commission deputy chairman Montek Singh Ahluwalia today said the country would clock over 8.5% economic expansion in 2010-11 despite a moderation in industrial growth. Industrial output in February rose slower-than-expected at 3.6% in February from a year earlier, while the Index of Industrial Production (IIP) has grew by 7.8% during April 2010-February 2011, compared to 10% in the previous corresponding period.

Concerns about high energy costs derailing the economic recovery in the region took a toll of Asian markets today. Japan's Nikkei 225 fell 0.5% as the nation's machinery orders dropped for the first time in three months in February. While the Shanghai Composite closed lower, shares of exploration companies surged on higher oil prices.

The Shanghai Composite fell 0.25%, the Hang Seng declined 0.38%, the KLSE Composite tanked 0.87%, the Straits Times contracted 0.84%, the Seoul Composite dipped 0.26% and the Taiwan Weighted ended 0.16% lower. Bucking the trend, the Jakarta Composite gained 0.11%.

Back home, foreign institutional investors were net buyers of stocks worth Rs384.85 crore on Friday. On the other hand, domestic institutional investors were net sellers of equities worth Rs128.40 crore on the day.

Punj Lloyd (down 2.49%) has informed the stock exchanges that its group company Sembawang Engineers and Constructors Pte Ltd, one of the leading engineering, procurement and construction companies in Singapore, has through its subsidiary Sembawang Development signed an agreement to acquire a 50% stake in a thermal coal mine company in central Kalimantan, Indonesia. The mining company holds a coal IUP license and currently has estimated resources of 134 million tonnes and potential reserves calculated at 57 million tonnes.

Coal India (CIL) (up 0.52%) has been conferred the coveted Maharatna status, giving the world's largest coal producer greater autonomy for taking investment decisions. The status will enable CIL to pursue its acquisition plans in South Africa, Indonesia, Australia and the US more aggressively.

In a move towards allowing large-scale private sector participation in the defence sector, leading power utility Tata Power Company (up 0.35%) has been awarded the contract to modernise the Airfield Infrastructure of the Indian Air Force (IAF) for an undisclosed amount.