LONDON -- It was a struggle on Monday after Friday's Nightmare On Wall Street.

Bids, rumored and actual, prevented the London market from sliding even further than it might have, but negative sentiment saw the leaders finish lower nonetheless, with a bout of futures-related selling souring things further towards the close. The

FTSE 100

finished 107.1 points, or 1.7%, lower at 6,268.

Interest-rate fears remain top of the agenda, with the

Federal Open Market Committee

expected to increase short-term interest rates on Wednesday by a quarter point. The word is that the

Bank of England

will follow suit on Feb. 11.

A couple of Anglo-French tie-ups are perhaps in the works.

Blue Circle Industries

was the day's star performer in the Footsie, its shares rising 70 pence, or 20.5%, to 414 after it was confirmed that

Lafarge

of France, the building materials group, had made an approach. Needless to say this received short shrift from BCI.

Out of the woodwork and late in the session, a bid approach for

Meyer International

emerged. The shares responded with a gain of 126p, or 33.6%, to 426, with

Saint Gobain

of France considered to be the name in the frame. The feeling in London is that the two companies would make a good fit.

The bid battle in the banking sector continued right down to the wire, with no counter-bid received by the close of play from

Bank of Scotland

to top the offer for

National Westminster Bank

(NW)

from

Royal Bank of Scotland

. However, the former has until midnight to make a play, although the market feels that we may have seen the last act in this long running Passion Play. BoS fell 40p, or 6.1%, to 620, NatWest ended the session 88p, or 6.9%, lower at 11.88 pounds and RBS fell 58p, or 5.5%, to 10.02 pounds.

In technology shares, ARM Holdings (ARM:LSE) gained 311p, or 9.2%, to 36.86 pounds following details of annual profits well in excess of market expectations.

Europe's continental bourses closed down sharply Monday, as investors decided to get out of the market prior to the monetary policy meetings of the Fed and the

European Central Bank

later this week. The

Xetra Dax

in Frankfurt tanked 231, or 3.3% to 6835.60 and the

CAC 40

in Paris closed 71.24 lower, or 1.2%, at 5659.81.

Most shares went lower from the open and stayed there, but the hyperactive European telecoms sector enabled some stocks to close higher. In Frankfurt,

Mannesmann

(MNNSY)

jumped 12.05, or 4.5%, to 280.25 euros, as it appeared

Vodafone's

(VOD) - Get Report

$170 billion bid looked increasingly likely to win after the U.K. company secured an agreement with France's

Vivendi

to create an Internet portal and carve up Mannesmann's fixed-telephony assets.

The deal, which robs Mannesmann of a possible white knight, also helped push and Vivendi shares 5 higher, or 5%, to 105 euros. However, Vodafone erased early gains to close down 5.25, or 1.5%, to 338.50 pence. "The noose is tightening," said one trader in Frankfurt.

Other favorites in Frankfurt had no news to allow them to buck the downward trend and ended painfully lower.

Deutsche Telekom

(DT) - Get Report

slumped 2.5, or 3.5%, to 69.40 euros and

SAP

(SAP) - Get Report

finished 61.50 lower, or 7.3%, at 783.50 euros.

Investors were also graced with a newspaper report saying that

British Telecom

(BTY)

was actively pursuing either an alliance or a merger with Spain's

Telefonica

(TEF) - Get Report

. BT shares ended down 83, or 6.6%, at 1182 pence and Telefonica finished 0.45 lower, or 1.7%, at 25.90 euros.