LONDON -- Thursday's long-awaited rally in London seems to have been a flash in the pan as the FTSE 100 turned red Friday morning to stand 42.70 points weaker at 6512.80.

Overshadowing the market is the after-effect of "triple witching" -- the early morning expiry of options, index options and futures contracts -- which brought with it the expected volatile trading as positions unwind.

Says analyst David Thwaites of

BNP Paribas

, "Some of the optimism we had yesterday has unwound. We are not getting a clear picture because of triple-witching and we will have to wait until we get a lead from the U.S."

IT software provider

Sage Group

led the decliners, plunging 8.7% to 529p ($7.46) as house broker

Deutsche Bank

warned that some analysts' estimates on earnings for the software company is more than a little optimistic.

Telcos also took a beating.

Colt Telecom

(COLT)

-- one of the star performers Thursday -- dropped 3.5% to

21.50.

British Telecom

(BTY)

fell 18p to 805 and

Vodafone

(VOD) - Get Report

lost a quarter penny to 274.25.

Phone equipment makers did little better.

Marconi

was down 22p at

11.22 despite the announcement that it and systems integrator

Tein Telecom

have signed a three-year contract with

Belgacom

to provide an optical communications network in Belgium.

One shred of good news was that

iTouch

, the newly listed provider of services for mobile phones, is joining Vodafone to provide messaging of results from the Sydney Olympics for Vodafone's operations in Australia and New Zealand. iTouch shot up 2.5% to 61.

On the results front,

Durlacher

, the high-tech research and investment house, reported pretax profits had more than tripled to

12.2 million. Durlacher hit a high of 455p in February at the height of the technology boom, but has since been punished. Its shares perked up on today's news, rising 3p to 114.5p.

Europe's other stock markets were lower, weighed down by tech and telecom shares. The

TST Recommends

CAC 40

in Paris was off 9.27 to 6628.64 and the

Xetra Dax

in Frankfurt was down 0.19 to 7048.31. The

Neuer Markt's

tech-heavy

Nemax 50

index was 56.0 lower to 5956.4.

Some big telcos slipped after

Lehman Brothers

cut its price targets on

KPN

(KPN)

,

Swisscom

(SCM) - Get Report

and

Teledanmark

. Midday KPN was down 0.18 euro to 29.02 ($25.11) and Swisscom was off 1 franc to 480.50 ($271.18).

However, not all telcos were having a bad day, as

Deutsche Telekom

(DT) - Get Report

was able to climb 1.45 euros to 44.45 and

France Telecom

(FTE)

was up 0.10 euro to 129.10.

Equipment maker

Alcatel

(ALA)

dropped 1.70 euros to 88.20 and

Ericsson

(ERICY)

fell 2.50 kronor to 184.00 ($18.96).

In Frankfurt, Internet service provider

T-Online

tanked after the company was rated "sell" by

UBS Warburg

. Midday T-Online shares on the Neuer Markt were down 1.55 euros to 28.95.