The index ended 174.7 points down at 5,136.6, with the Dow Jones Average off more than 200 points as the stock market closed.
It was a tense, nervous session with only 11 Footsie constituents managing to make any progress. The despair was not confined to the leader board. with the mid cap index slumping 59.9 to 4,751.8 although the small cap indicator displayed relative strength by restricting its retreat to 11.4 at 2,101.4.
Ironically the growing Clinton crisis took its toll as the Moscow share market, which had cast such a dark shadow over western markets, staged something of a rally following President Yeltsin's latest nomination for Prime Minister.
The Monetary Policy Committee's no-change interest rate decision was another blow. The committee's hint that rates have probably peaked was, however, lost in the clouds of gloom sweeping across the Atlantic.
Smiths Industries was one blue chip to make progress. As if celebrating their escape from relegation from Footsie, the shares rose 18p to 733p. The engineering to medical group was bitter early last month when rogue trades went through the order book at 711p; as it pointed out at the time, if they had occurred when the Footsie reckoning took place Smiths would have lost its cherished index place.
Centrica had the distinction of heading the truncated leader board following a strong profits performance. The shares jumped 9.25p to 108p.
Railtrack, up 45p to 1,495p, was encouraged by recent presentations in Paris and indications that the Government's public transport policy had not after all been shunted into the sidings. Stagecoach, with a 25p advance to 1,145p, was also a beneficiary.
Hopes of corporate activity as well as safe haven considerations continued to inspire the English generators, with National Power up 10p to 526p and PowerGen 12p to 830p. Other utilities, such as Thames Water, with an 8p gain to 1,100p, drew comfort from their heavy domestic exposure.
Poor old BTR, with a set of calamitous figures, led the retreat, off 24.5 to 107.75p, a new low. The warrants, which offer the "right" to subscribe for new shares at 405p, also fell from 0.06p to 0.05p. Before BTR's troubles became apparent they were 77p with the shares then nudging 400p.
Buy advice had little impact. Henderson Crosthwaite recommended Kingfisher only for the shares to fall 16p to 518p. Lehman Brothers offered a 930p target for new Footsie stock Colt Telecom but the shares fell 22.5p to 602.6p. Dixons did manage a 6p gain to 588p as HSBC made positive noises.
Vodafone, which completed its European investment presentations, was off 16p at 766p.
Marks & Spencer dropped 20p to 474p, lowest for more than a year. Two investment houses downgraded profit estimates. ABN Amro went from pounds 1.05bn to pounds 1.03bn and Merrill Lynch from pounds 1.06bn to pounds 990m.
Football clubs, reflecting activity off rather than on the pitch, had a rousing session. After Manchester Utd it was the turn of doubles club Arsenal to score.
The shares, traded on the fringe Ofex market, jumped pounds 1,100 to pounds 4,000 as Carlton Communications said it was in talks which could lead to a takeover. The club is valued at around pounds 240m. Carlton eased 2p to 423p.
ManU continued its progress following the agreed BSkyB bid, adding 6.5p to 222p. Others to move ahead included Aston Villa, 27.5p to 660p, Chelsea Village, 10p to 86.5p, and Leeds Sporting 3p to 19.75p. Tottenham Hotspur improved 2p to 66p with talk of a large buyer, prepared to pay 67p, hovering. ENIC, which has stake in a number of clubs including Glasgow Rangers, put on 8.5p to 147.5p.
ML Laboratories firmed 2p to 67p with Proteus International adding 1.5p to 38p. Both are in the orbit of Kevin Leech and the resilience of the shares on such a downbeat day prompted speculation of a merger.
Henlys held at 455p as Volvo moved its stake to 9.5 per cent. It has said it intends to go to 10 per cent.
Car Group, the second-hand dealer, reversed 0.5p to 9p as stories went the rounds that its refinancing was imminent although it was thought unlikely to offer any share enhancement. Springwood, the leisure group, shaded to 83.5p although chairman Adam Page was said to have made positive presentations to institutions.
Marston Thompson & Evershed, the Pedigree bitter brewer, rose 13.5p to 224p after disclosing talks which could lead to the securitisation of its tenanted pubs. Royal Doulton cracked 27.5p to 106p, a low, after a gloomy statement.
Engineer UPF remained at 112p as bidder Hartrade said it had gathered acceptances representing 95 per cent of the capital.
SEAQ VOLUME: 1.09bn
SEAQ TRADES: 59,194
GILTS INDEX: 109.73 +1.12
MICHAEL ASHCROFT, the controversial tycoon, is not enjoying a rapturous welcome on his return to the stock market. The property group Carlisle, his comeback vehicle, fell 1p to 10p. When the Ashcroft excitement was at its height, the shares touched 18p. Carlisle is being reshaped into a services group. It will be headed by Mr Ashcroft, who created the ADT car auction to security group. He will have a controlling stake.
EMERALD ENERGY enjoyed one of its periodic bouts of excitement. The shares rose 0.5p to 7.25p with nearly 23 million traded. T Hoare & Co, the stockbroker specialising in resources stocks, is not keen on the Colombian explorer and suggests taking profits.
SHERWOOD INTERNATIONAL, the computer group, jumped 100p to 925p after buying a 12.65 per cent stake in Allenbrook, a US provider of casualty and property systems.