At one time Footsie crashed more than 200 points; it ended at 5,477, down 190.4, wiping nearly pounds 34bn from stock market values.
Trading was not heavy and there was no wave of selling. "Its more a buyers' strike," said one trader.
Nevertheless, fears of a world slump were in the air. Suggestions that relatively healthy economies were about to be hit was one of the new influences. There was frightened talk of a round of devaluations as it appeared that the Asian infection was spreading to South America, with Venezuela said to be the first to be planning a cut its exchange rate.
Russia's continuing difficulties also loomed large, with worries of a stock market meltdown. It added coals to the flames of unease by claiming its problems were even more formidable than it had thought, and pressure emerged for the resignation of President Yeltsin.
With the Far East deep in the doldrums, the global economic scene was suddenly looking decidedly grim. Japanese and other Asian shares are still in retreat, and with the German market weak on the country's banking links with Russia the clouds of gloom were almost impenetrable.
On top of the devaluation worries there were nagging fears about the possible repercussions of President Clinton's bombing raids. And, just to pile on the agony, technical considerations arising from the monthly futures and options expiry weighed on prices.
It was all too much. London took fright from the opening bell. Before New York opened Footsie was more than 100 points off. When Wall Street staged a ragged retreat, with the Dow Jones Average more than 200 points lower during London hours, the index followed, melting 212.3 at one time.
Footsie has suffered a week which, in points terms, produced its biggest ever closing gain since the turmoil of the 1987 crash, and yesterday its steepest post-crash fall. It started the week at 5,455, therefore managing a modest gain. The index opened the year at 5,135.5.
Supporting shares also experienced devastation. The mid cap index slumped 84.8 points to 5,074.5 and the small cap crashed to a new low for the year, off 23.6 at 2,298.6. But government stocks provided one area of stability.
Only eight Footsie constituents managed to post gains. Prudential Corporation, up 24p to 845p led the rearguard action. One influence was a new staff training scheme. Another was buy advice from Dresdner Kleinwort Benson and Lehman Brothers. The feeling that the Pru's days of independence are numbered was another factor. Consolidations in the insurance industry, as in so many others, seem to be gathering pace: on Thursday two US groups announced an $18bn merger.
The Pru is seen as a possible candidate to satisfy the ambitions of Lloyds TSB, known to be preparing to hit the acquisition trail. Halifax, said to be eyeing Norwich Union, added 2p to 706p and Woolwich also gained 2p to 338p.
Bankers Schroders headed the blue-chip rout, falling 132p to 1,348p. Diageo, the spirits group, was dumped 63p to 652p and engineer Siebe 20p to 226p.
Most analysts' buy suggestions had little impact. For example, Great Universal Stores was 6p firmer at 740p on Salomon Smith Barney support.
Boots, as BT Alex.Brown trimmed its earnings per share forecast, fell 27p to 988p. Barratt Developments lost 5p to 203.5p as Panmure Gordon lowered its profit estimates for the industry.
Imperial Chemical Industries fell 26p to 660p. Charles Stanley downgraded its advice to hold. It expects profits of pounds 404m this year.
Allders, the stores chain, held at 136p after buying in 8.5 million shares, representing 9.9 per cent of its capital, at 136p.
But retailer Essex Furniture fell 4p to a 27.5p low. Three years ago the shares were 281p. There are fears the company has been mauled badly in the retail recession. Last year the group made profits of pounds 913,000.
Discount chain Brown & Jackson, the Poundstretcher operation, returned to profits, making pounds 7.5m against a pounds 2.7m loss. The shares, after an early gain, were enveloped in the gloom, ending 1p down at 74p.
Engineer James Dickie hardened 9p to 137.5p as the long-mooted takeover bid - from engineer Eliza Tinsley - arrived. The share exchange offer values Dickie at pounds 14m.
It was not a day for newcomers. Inter Link Foods almost hit 120p but had to settle for a tiny 0.5p premium at 110.5p.
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