LONDON -- It was a confusing and volatile Monday morning on London markets following a poorly executed basket trade. Also, Hutchison Whampoa issued a convertible bond, which is convertible into Vodafone (VOD) - Get Vodafone Group Plc Sponsored ADR Report shares.

By midday, the

FTSE 100

was down 38.90 points to 6561.80. The index plunged 209 points to 6392 after a trader at a European house apparently executed a basket trade poorly. As a result, activity in 23 stocks was temporarily halted after they moved limit down. The stock exchange is looking into this morning's action.

Then came the news that Hutchison is reducing its 3.4% holding in Vodafone to around 2.0% by issuing between $2.5 billion (

1.75 billion) and $3 billion of convertible bonds -- which will be convertible into Vodafone shares -- and by placing a further 125 million shares.

Speculation about what Hutchison intended to do with its Vodafone stock has hung over the company since a lockup period expired at the start of the month. Today's action may remove some of the uncertainty, but for the moment Vodafone still looks heavy, even though it has bounced from a session low of 265p ($3.84) to stand at 271p, around 4.6% lower than its Friday close. A whopping 280 million shares have changed hands.

Fellow FTSE 100 telecom heavyweight

British Telecom


initially tried to shrug off the weakness in its rival by moving higher. But as lunchtime approached, the company joined the list of stocks in the red as it fell 3p to 819.

The two major integrated oil stocks,





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

, held up well as they largely ignored


hike in production. BP was up a penny to 653.5, while Shell slipped 3p to 606.5.

The cartel's move has prompted a swath of broker notes. Most are speculating on whether the move will be enough to drive crude prices lower and what impact this will have on share prices.

Lehman Brothers

says that oil stocks will remain attractive because their relative valuation is consistent with a $21 to $22 per barrel level of crude oil.

Williams de Broe

feels that OPEC's hike will be insufficient to meet the increased winter demand. Even though the brokers expect prices to ease in the short term, they feel that crude will not dip much below $30. As winter nears, they say prices could "well spike up over $40."

Europe's other major stock markets were mixed early Monday, as the

CAC 40

in Paris was up 5.46 to 6708.82 and the

Xetra Dax

in Frankfurt was down 41.95 to 7225.82. The

TheStreet Recommends

Neuer Markt's


Nemax 50

index was 81.4 lower to 6182.8.



poor performance Friday weighed heavily on technology shares in Frankfurt.



fell 0.90 euro to 68.00 ($58.92),


(EPC) - Get Edgewell Personal Care Co. Report

fell 1.70 euros to 106.80 and software maker


(SAP) - Get SAP SE Sponsored ADR Report

was 3.50 euros lower to 288.50.

Many big telcos also were struggling, with

Deutsche Telekom

(DT) - Get Dynatrace, Inc. Report

down 0.19 euro to 44.46,



off 0.31 euro to 29.99 and

France Telecom


down 3.20 euros to 135.00.

Elsewhere in Paris, oil company

Total Fina Elf

(TOT) - Get Total SA Sponsored ADR Class B Report

rose 3.50 euros to 182.10 amid speculation that OPEC's decision over the weekend to increase oil production won't lower energy costs by much.