Indian stock index down 5.3 percent

MUMBAI, India – India’s benchmark Sensex stock index dived 5.3 percent Tuesday as hopes faded that China’s $586 billion stimulus package will rescue the world economy and on news that some of India’s largest companies are cutting back projects.

The Sensex fell 562.27 points to 9,973.89 after surging 5.7 percent on Monday.

“The whole stimulus package from China will stretch until 2010,” said Gul Teckchandani, an independent investment analyst based in Mumbai. The Indian market could fall further, he said.

Real estate, oil and gas, and capital goods stocks led declines.

Infrastructure conglomerate Jaiprakash Associates Ltd. lost 9.3 percent in midday trade. Tata Steel was down 8.7 percent and copper producer Sterlite Industries had shed 8.5 percent.