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LONDON -- After a bright start, Europe's markets slipped back into the red as midday approached. Many European investors were off from work for All Saints' Day, and traders say it has been a lackluster session.

By midday, the

FTSE 100

was down 3 points to 6436. Perhaps not surprisingly, given the

Nasdaq Composite Index's

huge rise overnight, the tech sector was looking pretty good. The

Techmark 100

was up 28 points to 3419.

The slide in the FTSE was largely caused by weakness in the index's two big telecom stocks,

British Telecom




(VOD) - Get Vodafone Group Plc Report

. Traders said that despite the recent strong performances in these stocks, the problems of mounting debt levels, future credit downgrades and reluctance by banks to increase lending have not gone away.

Vodafone continues to struggle to decisively break above key resistance around 290p. The monthly charts also show a strong barrier at 300p. After posting an early high of 295.5 pence, the shares slid 9.25p to stand at 277.5. There is also talk of a significant new broker downgrade for the wireless giant. Meanwhile, BT plunged back below the 800p level as the shares dropped a hefty 41p to 767.

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Tech stocks began where their U.S. and Asian counterparts left off. Network equipment supplier



announced a contract in Malaysia and rose to a high of 902p. However, the shares have since slipped and were down 8p to 862. It was a similar story for fiber optic component maker

Bookham Technology


, which was down 14p to


Embattled cable operator



rose following renewed takeover speculation. The shares posted the biggest gain on the main index, up 8.75p to 121.75.

Elsewhere, a profits warning from


, which designs derivatives dealing systems, wiped a third off the value of its shares. The company blames delays regarding its Internet platform. The shares plunged 33% lower to 121.5p.

Banks continued to exhibit good form with



up 13p to 995.

Royal Bank of Scotland

shares continued to flourish in the wake of Tuesday's bullish note from

Merrill Lynch

, and the shares climbed 24p to


It was a similar story on the Continent, where the


in Paris was down 26 points at 6372 and the

Xetra Dax

in Frankfurt was down 31 points at 7046.

There was weakness in stocks that had risen Tuesday. Telecom equipment maker



, which had reported sterling results Tuesday, was down 2.20 euros to 71.40.

Telecom operators were also lower.



fell 1.10 euros at 23.10,

Deutsche Telekom

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was 1.06 euros lower at 43.19 and

Telecom Italia


was down 0.35 euro at 13.40.