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LONDON -- Pharmaceutical stocks caused the U.K. markets to stumble Monday morning as newspaper reports surfaced that Glaxo Wellcome's (GLX) Ziagen HIV treatment has possible fatal side effects.

Glaxo's shares slipped 30p to

19.39 ($28.89) in a knee-jerk reaction from investors. Merger partner

SmithKline Beecham

(SBH) - Get Sally Beauty Holdings, Inc. Report

also slid, falling 19p to 875. Overall, the

FTSE 100

was 47 points lower to 6496.7 in early trading.

Slightly softer oil stocks greased the Footsie's slide.



slipped 5.5p to 624, while


(SC) - Get Santander Consumer USA Holdings, Inc. Report

eased 8.5p to 578.

In the retail sector, drugstore chain

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got a lift on weekend reports that


(WMT) - Get Walmart Inc. Report

is considering a

6 billion takeover of the company. The shares were 24p firmer at 524. This would be Wal-Mart's second foray into the U.K., following its purchase of supermarket chain


earlier this year.

Telcos had a quiet start to the week.


(VOD) - Get Vodafone Group Plc Report

remained out of favor and fell 4p to 264.

British Telecom


looked more resilient as it attempted to consolidate Friday's gains made on the back of a report about a possible tie-up between it and


(T) - Get AT&T Inc. Report

(yes, that old story again). However, the shares were lately in the red, standing down 3p at 834.



rose 13p to 509, albeit in light trade. There is speculation that Energis may be poised to bid for telco


, which was unchanged at 128.25p.

Bookham Technology


was volatile as it gave back some of Friday's stellar gains on speculation that

Nortel Networks


is preparing a bid for the optical component maker. The shares dropped 110p to

38.50, which in turn weighed on the

Techmark 100

index, which was 17.77 points lower to 3634.07.

Europe's other major stock markets were lower midday Monday as the

CAC 40

in Paris was down 51.76 to 6542.49 and the

Xetra Dax

in Frankfurt was off 73.22 to 7159.20. The

Neuer Markt's


Nemax 50

index was 20.4 lower to 5656.9.

Germany's biggest utility



rose 0.11 euro to 57.11 ($51.79), after the

Financial Times

reported it was considering a merger with France's

Suez Lyonnaise

, which dropped 4.30 euros to 183.40.

Telecom operators continued to feel pressure from the costs of building third-generation wireless networks, with

Deutsche Telekom

(DT) - Get Dynatrace, Inc. Report

down 0.88 euro to 45.15,


(TEF) - Get Telefónica SA Report

off 1.27 euros to 22.63 and



down 2.35 euros to 39.65.

In Paris things weren't quite so ugly, as

France Telecom


managed to climb 0.40 euro to 129.40, but telco equipment manufacturer



got hit by profit-taking, dipping 1.30 euros to 83.70.

Elsewhere, German blue-chip tech shares were mixed, with


up 1.08 euros to 171.00,


(EPC) - Get Edgewell Personal Care Co. Report

down 1.49 euros to 97.00 and software maker


(SAP) - Get SAP SE Report

4.59 euros lower to 264.20.