The BSE benchmark, after touching a high of 18,959 slipped to a low of 18,797.
The index has finally ended at 18,865 - up 29 points. Nifty ended up 22 points at 5,704.
Eight core sectors output fell 2.5% in February, against a growth of 3.1% in the previous month and a whopping 7.7% expansion in February, 2012, dashing the hope of policy makers that the industry will revive in the third quarter of the current financial year.
The eight core sectors, which have a weight of 38% in the Index of Industrial Production, saw five of them registering a contraction in February year-on-year, showed official data released on Monday.
Foreign Institutional Investors have poured in a record Rs 1.4 lakh crore ($26 billion) in the Indian stock market in FY 2012-13, the highest ever since overseas entities started investing in the country.
Meanwhile in Asia, Japan's Nikkei share average fell to a three-week low on Monday as investors took profits in stocks such as exporters and financials that had gained in recent weeks on the back of a weaker yen and prospects of monetary easing.
The Nikkei slipped 2% to 12,135. Hang Seng was down over half a per cent as well.
From the sectoral pack, BSE realty index soared 5.3% or 96 points to1,875. Capital goods, healthcare and power sectors have also seen buying interest and were up 1-2% each.
On the other hand, metal stocks lost their sheen as the BSE metal index ended down 1.2% at 8,652.
Auto index slipped 0.7% at 9,920. Avinash Gupta, Assistant Vice President Research Equity, Bonanza Portfolio Limited said, "the market had formed a bottom few days back, and realty index had not participated much in it.
"PLus the sector is a higher beta sector therefore the correction after the recent fall was expected. Some midcap shares, like Sobha Developers, which were undervalued have started to look attractive at the current juncture."
BHEL led the gainers list -- up 2.8% at Rs 182. Dr Reddy's and Cipla from the pharma space, were up over 1-3%
TN orders Sterlite to shut copper smelter
Markets end higher on value-buying
'In India, there is very little trust in China'
Markets continue winning streak led by financials
Bourses to extend pre-open call auction from April