LONDON -- It was a dreadful day for Europe's markets with telecommunication and technology shares bearing the brunt of it.

In London, the

FTSE 100

closed down 81 points, or 1.3%, to 6199 and the

Techmark 100

wallowed in the red all day to close down 73 points, or 1.9%, to 3697.

The market was off its lows, though, as

Bank of Scotland

surged on reports it is the target of a takeover play. Bank of Scotland shares, which had been trading lower, finished with a gain of 38p, or 6.8%, to 596p. Suitable candidates would be

HSBC

(HBC)

and

Barclays

(BCS) - Get Report

. Barclays ended up 2p at

17.34, but HSBC was down 20p, or 2.1%, at 939.

Aside from the late-minute flurry in the banks, it was yet another miserable day's trade.

BP

(BPA)

was off 14p, or 2.2%, to 624 and

Shell

(SC) - Get Report

lost 12p, or 2.0%, to 583.

"There's some profit taking but the big issue for equity markets is that investors think the current oil price is unsustainable," said Jonathan Wright of

Merrill Lynch

.

A profits warning from U.S. telecom giant

Sprint

(FON)

savaged telecoms.

Telewest Communications

(TWSTY)

headed up the losers, down 17.25p, or 10.8%, to 142 and

Vodafone

(VOD) - Get Report

closed only a penny off its year low, losing 7.5p, or 3.0%, to 239.50.

British Telecom

(BT)

fell 43p, or 5.4%, to reach a new 52-week low of 748p. Analyst Greg Main at

ABN Amro

said the thumbs down with BT reflected disappointment that a wireless presentation by the firm on Wednesday didn't reveal any new information about an IPO for the wireless operations. He also said the market was increasingly skeptical about the proposed closer links with

AT&T

.

"BT is renowned for not wanting to give up control, which is what they would have to do because AT&T is the bigger party," said Main.

In tech,

Sema

fell 45p, or 3.7%, to

11.70: the timing of an announcement that directors had sold shares didn't help.

Baltimore Technologies

(BALT)

lost 30p, or 4.3%, to 670.

Despite these conditions, the IPO of microprocessor designer

ARC Cores

was an unqualified success. The chip designer soared to 455p, after floating at 210, before easing slightly to finish at 428p. That gives the company a market cap of over

1 billion.

After starting out higher, Europe's other major stock markets turned tail and finished well down on the day. The

CAC-40

in Paris closed down 150 points, or 2.3%, at 6,255 and the

Xetra Dax

in Frankfurt was down 111 points, or 1.6%, at 6,642 late in the trading session.

Things were ugly for techs, with

SAP

(SAP) - Get Report

down 4.50 euros, or 1.7%, at 258.00 and

Siemens

(SMAWY)

down 7.75 euros, or 4.7%, at 158.25. As a result, late in the session the Neuer Markt's tech-heavy

Nemax 50

index was 146 points lower, or 2.9%, at 4,917.

Nor was it any better in telecoms.

France Telecom

(FTE)

was down 3.80 euros, or 3.2%, at 117.00 and

Deutsche Telekom

(DT) - Get Report

fell 1.06 euros, or 2.7%, to 38.74.

In Paris, insurer and financial services group

AXA

(AXA)

fell 6.00 euros, or 3.9%, to 150.0 after posting less-than-expected first-half earnings.