LONDON, July 11: European stocks lost ground on Tuesday, with the telecoms sector under scrutiny following an overnight profits warning from US group Lucent, dealers said.

London's FTSE 100 index of leading shares slid 0.33 per cent to 5,877.70 points, Frankfurt's DAX 30 index fell 0.77 per cent to 5,662.55 points and the Paris CAC 40 shed 0.62 per cent to 4,951.46.

The DJ Euro Stoxx 50 index of leading eurozone shares decreased 0.59 percent to 3,644.88 points.

The euro stood at $1.2738.

US shares had closed mixed on Monday as an early rally inspired by generally positive sentiment on earnings reports for the second quarter faded late in the day.

Japanese share prices closed lower Tuesday as investors took profits ahead of a key Bank of Japan decision later this week on whether to raise interest rates, dealers said.

In Tuesday's Paris trade, shares in telecommunications equipment maker Alcatel fell by 4.91 per cent to 9.30 euros after a profits warning by peer Lucent -- with which it is merging.Overnight Alcatel and Lucent said that they expected to cut about 9,000 jobs and that their merger arrangements were going ahead as planned.

But Lucent reported that its sales had fallen by 13.0 per cent in the third quarter to 2.04 billion dollars (1.6 billion euros).

It also said that earnings per share were likely to be 2.0 cents. Analysts had expected about 4.0 cents.

Other technology shares were lower as Lucent's gloomy update came hot on the heels of disappointment from 3I, Tomtom, Business Objects and AMD last week and from Toshiba and LG Philips overnight.

In Frankfurt trading, the share price of German engineering giant Siemens sank 1.92 per cent to 66.40 euros.

Back on Wall Street on Monday, the Dow Jones Industrial Average rose by 0.12 per cent to 11,103.55 points, paring gains after rising more than 80 points in early trading.

The tech-rich Nasdaq meanwhile fell 0.62 per cent to 2,116.93 points, while the broad market Standard and Poor's 500 index edged up 0.15 per cent to 1,267.34.

The market opened strongly after last week's sell-off as investors put aside for the moment concerns about inflation and higher interest rates and looked at what appears to be a strong second-quarter earnings season. But most of the early gains faded late in the day.—AFP