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LONDON -- Unlike the U.S.' enemies around the world, Europe's markets are not enjoying the spectacle of the bastion of democracy facing a growing constitutional crisis. The markets are trying to tread water, but are beginning to look increasingly weak.

As lunchtime approached, the

FTSE 100

stood down 43 points at 6399 and the

Techmark 100

was off 65 points at 3282.

Optical component maker

Bookham Technology

(BKHM)

was looking particularly ugly, continuing its decline after releasing third-quarter results on Wednesday that showed widening losses. The stock plunged to a session low of

15.83 ($22.64), which is effectively the lowest level it has seen since the stock was floated back in April. By midday, the stock was down 176p at

16.50, making it the FTSE 100's biggest faller and bringing the two-day decline to 23%.

Darren Sinden of brokers

IG Markets

said the trouble is that many investors had gotten comfortable buying Bookham on its almost daily dip and then selling the stock out a few hours later for a hefty profit. But now they are averaging their positions all the way down, convinced that the stock will rise. Averaging results in a position where the mean entry price is closer to the current market price, but it also results in a much larger position.

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As a result, if prices don't recover as the buyer expects, the subsequent loss is very painful indeed. Rogue trader Nick Leeson provides perhaps the most famous example of someone averaging, when the size of his off side position in

Nikkei

futures led to the collapse of

Barings Bank

.

The charts show some interesting things about Bookham. Its previous low is

16.00, which it posted on April 17. The same day it posted a high of

24.50. There's a certain symmetry to all this. Bookham started its slide on Wednesday after hitting a high of -- you guessed it --

24.50.

In the greater scheme of things, Friday's blip below

16.00 may prove to be just that -- a blip. But the

16.00 level really does need to hold, otherwise investors will start to look closer at valuations. And if the company's founders and initial backers were happy to float at

10.00, Bookham may not find a base until it gets closer to this level.

British Telecom

(BTY)

has attracted a string of broker buzz after Thursday's third-quarter figures and details of its restructuring. Some is good, but most is bad and includes a downgrade from

HSBC

, which lowered its price target from 895p to 830p. The stock sunk 41p to 708.

As well as Bookham's woes, the tech sector was decidedly out of sorts.

Baltimore Technologies

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was off a hefty 5.8% to 457p,

Logica

was down 65p to

18.05 and

Marconi

was 20p weaker at 816.

Pharmaceuticals look painful as they are marked down on the U.S. election uncertainty.

AstraZeneca

(AZN) - Get Astrazeneca PLC Sponsored ADR Report

fell 80p to

33.19,

Glaxo Wellcome

(GLX)

shed 53p to

20.50 and

SmithKline Beecham

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eased 23p to 932.

The Continent's markets were stuck in a narrow range and by midday the

CAC-40

in Paris was down 4 points at 6267, while the

Xetra Dax

in Frankfurt was down 9 points at 6950.

The telecom sector was a good illustration of the overall market's indecision.

France Telecom

(FTE)

was up 2.50 euros to 113.00 ($97.18), while

Deutsche Telekom

(DT) - Get Dynatrace, Inc. Report

was down 0.57 euro to 39.61.

Insurer

Munich RE

continued to gain from Thursday's decision by

Goldman Sachs

to raise its price target to 430 euros from 385 euros and keep it on its recommended share list. The shares were up another 4.27 euros to 395.27, bringing the two-day rise to 6%.