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LONDON -- The U.K. market managed to recoup most of the early losses caused by jitters in the pharmaceutical sector, but Tuesday's interest rate decision by the Federal Reserve cast a long shadow over most of Monday's proceedings.

The

FTSE 100

closed down just 1.5 points at 6,542.2, helped back up by early gains on the

Dow Jones Industrial Average

and

Nasdaq Composite

. This was well up from the session low of 6,491.4, a fall caused by reports that

Glaxo Wellcome's

(GLX)

HIV drug Ziagen could produce a fatal reaction in certain patients. Glaxo's shares, which fell to a session low of

19.37 ($29.06), reflected the general market and by the close had recouped the initial losses to end up 18p, or 0.9%, at

19.85

Telecom stocks also kept the market busy as the market reacted to news that the credit rating agency

Standard & Poors

put a number of the winners of the German auction for mobile phone licenses on watch for a downgrade. Strangely,

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Vodafone

(VOD) - Get Vodafone Group Plc Report

, which was not on the S&P list fell 3.5, or 1.3%, to 264.5, while

British Telecom

(BTY)

, which was on the list, managed to close up 4p, or 0.5%, to 841. Go figure.

On the Continent,

Deutsche Telekom

(DT) - Get Dynatrace, Inc. Report

was down 2.03 euros, or 4.4%, at 44.00,

France Telecom

(FTE)

was 2.60 euros lower, or 2%, to 126.40 and

Sonera

(SNRA)

ended off 3.54 euros, or 8.4%, to 38.46.

As a result, most of Europe's other major stock markets finished Monday lower, as the

CAC 40

in Paris ended down 22.7, or 0.3%, at 6,571.6 and late in the German session the

Xetra Dax

in Frankfurt was off 16.9, or 0.2%, at 7,215.4. However, the Neuer Markt's tech-heavy

Nemax 50

index was 8.3 higher, or 0.2%, at 5,685.6.

U.K. technology stocks were among today's biggest casualties. The Footsie's biggest faller was optical component maker

Bookham Technology

(BKHM)

, which gave back a large part of Friday's gains made on speculation it was in talks to be acquired by

Nortel Networks

(NT)

. The stock closed down 160p, or 4.0%, at

38.00. Following close behind was IT services group

CMG

, which slid 45p, or 3.6%, to

11.95.

Chip designer

ARM Holdings

(ARMHY)

escaped the rout and closed up 22p, or 3.1%, at 744, helping the

Techmark 100

index to close unchanged at 3,651.66.

Germany's biggest utility

E.ON

(EON)

rose 0.60 euros, or 1.1%, to 57.60 ($52.24), after the

Financial Times

reported it was considering a merger with France's

Suez Lyonnaise

, which dropped 6.10 euros, or 3.3%, to 181.60.

Most German blue-chip technology shares were lower, with

Epcos

(EPC) - Get Edgewell Personal Care Co. Report

down 1.49 euros, or 1.5%, at 97.00 and software maker

SAP

(SAP) - Get SAP SE Report

3.29 euros lower, or 1.2%, at 265.50.

Siemens

(SMWAY)

, however, was up 4.98 euros, or 2.9%, at 174.90.