Bombay Stock Exchange building
BSE benchmark index Sensex is likely to open on a weak note on Monday.Picture: A man walks past the Bombay Stock Exchange (BSE) building in Mumbai, India, July 15, 2015Reuters file

Indian stock markets are likely to correct on Monday in response to weak retail inflation and factory output, or index of industrial production (IIP) data released on Friday after trading hours.

The benchmark indices -- S&P BSE Sensex and NSE Nifty -- posted huge losses during the week, with the Sensex registering its worst weekly fall in seven years, since October 2009. The Sensex lost 1,631 points or 6.62 percent to close at 22,986, while the broader Nifty shed 508 points or 6.79 per cent to settle at 6,981. 

On Friday, the government released data that showed retail inflation hitting a 17-month high of 5.69 percent in January 2016 as a result of high food prices, though it was below the Reserve Bank of India's (RBI) target of 6 percent.

Food inflation was 6.85 percent as against 6.40 percent in December.

Factory output, or IIP, contracted for the second straight month in December at 1.3 percent after shrinking 3.2 percent in the preceding month. A few days ago, the government estimated the third quarter GDP growth rate at 7.3 percent and the projection for FY2016 at 7.6 percent.

These were the last set of retail inflation and IIP numbers before the presentation of the Union Budget for FY2017 by union Finance Minister Arun Jaitley on Feb.29. Both global and domestic investors would be watching for commitment to fiscal consolidation and reforms by the Modi government.

Tata Motors, Bharti Airtel, M&M, Axis Bank and NTPC were the top Sensex gainers on Friday, while BHEL, Adani Ports, ONGC, Hindalco and L&T lost. 

The day also saw many stock hitting a new 52-week low in the aftermath of global sell-off and weak corporate earnings.

Stock that plunged to a new-year low included Mahindra, Indian Bank, Kalpatru Power, Karnataka Bank, TCS, State Bank of India, Tata Coffee, Tata Power, IDBI Bank, Canara Bank, Tata Chemicals, DLF, NMDC, ACC, ICICI Bank, REC, Nestle India, Eros International, Larsen & Toubro, Punjab National Bank, SAIL, Allahabad Bank and Bank of Baroda. 

Poor show by most of the state-owned banks due to higher provisioning for bad loans resulted in a drastic fall in their third quarter net profit, triggering a sell-off.

Foreign institutional investors (FIIs) were net sellers of Indian equities valued at Rs 398.37 crore, while domestic institutional investors were net buyers at Rs 545.07 crore.

The rupee gained 7 paise to close at 68.23 to the dollar on Friday, while gold gained Rs 850 to close at Rs 29,650.