In the previous session, the BSE barometer settled 262 points, or 0.70 per cent, lower at 37,123.31.
However, fuel and power basket continued to witness deflation at 4 per cent in August as against 3.64 per cent in July.
In the bullion market, gold prices for 24 Karat rose to Rs 38,860 per 10 gram from Saturday's closing price of Rs 38,400.
Analysts said raising of bets by participants mainly kept crude prices to trade higher.
After touching a low of 37,111.29, the 30-share index was trading 210.02 points, or 0.56 per cent, lower at 37,174.97.
Weak opening in domestic equities and sustained foreign fund outflows also weighed on the domestic currency.
With retail inflation inched up marginally to 3.21 per cent in August, and industrial production growth slowing to 4.3 per cent in July.
The latest inflows have been triggered by improving investor sentiment on the back of easing US China trade war.
Participants will also track WPI inflation data scheduled to be announced on Monday.
RIL, HDFC Bank, HDFC and Kotak Mahindra Bank were the other winners in terms of market valuation.