The Sensex plunged over 750 points last week and settled at 16,737.07, while S&P CNX Nifty feel nearly 100 points to close at 4,982.60 on Friday.
Analysts believe the markets may again feel the bear pressure if crude oil remains at record high levels and inflation figures do not improve this week.
Oil rallied to a fresh record of $124.61 a barrel on May 9 as strong diesel demand outweighed signs of rising Opec supplies, while the domestic currency has weakened to 41.76 against the US currency on Thursday.
"The bears are rearing their heads further and threatening real hard," a report by domestic brokerage Sharekhan stated, adding that Sensex would now first head straight for 15,300 levels, which is a critical support.A break below would accelerate this fall and targets can be pegged at support level of 14,500, it added.
However, marketmen believe the release of industrial production data may provide help in providing some positive trigger, while global cues might also provide some direction to the domestic markets.
Global rating agency Standard and Poor's positive outlook on health of the Indian bourses brought a ray of hope for traders and investors.
S&P's Managing Director and Region Head South and South-East Asia R Ravimohan on Friday said volumes in the bourses have started returning and it would soon revive discounting any direct impact of the US slowdown on the stock markets.
Also, the corporate results announced so far have been more or less in line with market expectations, which provided the a positive direction to the market last month. However, a host of companies are still left to announce their results this week.
The firms that are scheduled to announce their quarterly results next week include Unichem Laboratories, Blue Star, Indiabulls Real Estate, Gail (India), Mercator Lines, Punjab National Bank, Voltas, SAIL and Bank of India among others.
Meanwhile, inflation still remains a major concern and obstacle in the domestic growth and experts believe high inflation may compel the government to take more fiscal measures to rein in prices in addition to slew of measures adopted recently.
The WPI-based Inflation, had risen to a nearly four-year high of 7.61 per cent for the week ended April 26 on the back of rising prices of tea, spices, fruits, vegetables and some manufactured products. It was 7.57 per cent in the week before and 6.01 per cent in the year-ago period.
