LONDON -- Looking at the U.K. markets on Thursday is not a pretty sight, but take out the telecom sector and it's not quite so bad. In fact, there are some encouraging signs, although many of these have been blown away by the current demise on Wall Street. The

FTSE 100

ended 74.5 points lower, or 1.2%, at 6,239.0, while the


shed 78.5 points, or 2.3%, to 3,321.5.

The worry in the telcom sector is that the cost of new mobile phone licenses and infrastructure is escalating, and the likes of

Vodafone AirTouch

(VOD) - Get Report

are taking a severe hit, the stock losing 22p, or 7.7%, to 264 ($4.01): that's around 65 points off the index for a start.



hardly helped the situation by announcing its intention to issue a five-year, $450-million convertible bond issue, and the share price fell 18p, or 7.1%, to 235.

Even supposedly good news couldn't help matters.

Colt Telecom


shed 146p, or 6.4%, to

21.44, investors ignoring the company's plans to launch an Internet Solutions center in Madrid and Milan.



announced a three-year agreement between its wholly owned subsidiary

Energis Communications

and content provider

365 Corporation

, but Energis still fell 251p, or 9.5% to


So, where was the good news? Well,


took a distinct turn for the better, rising 85p, or 2.9%, to

30.45, while the gene factor boosted


67p, or 5.8%, to


Glaxo Wellcome


staged an impressive turnaround; after losing 46p at one stage, it finished with a gain of 8p, or 0.4%, at

19.20. But its merger partner

SmithKline Beecham

(SBH) - Get Report

failed to catch the late trend and closed with a loss of 3p, or 0.4%, at 865.

It was a similar story on the Continent. The

CAC 40

in Paris ended down 207.1, or 3.1%, at 6,400.8. Late in the German trading day, the

Xetra Dax

in Frankfurt was down 188.1, or 2.7%, at 6,868.0 and the Neuer Markt's tech-heavy

Nemax 50

index was down 224.2, or 4.0%, at 5,332.6.

Deutsche Telekom

(DT) - Get Report

fell 5.61 euros, or 8.8%, to 57.90 ($55.00) amid reports that the company was preparing a bid for



following the breakdown of its merger with




France Telecom


closed down 8.00 euros, or 5.1%, at 149.00 after the company confirmed it was hoping to buy out Deutsche Telekom's stake in the Italian telephone joint venture




(TEF) - Get Report

ended down 0.60 euros, or 2.7%, at 21.55.