GKN crashed 70p to 1,148p; BTR found yet another low, off 6p at 154p, and General Electric Co lost 9p to 371p.
Among second-liners, Pilkington cracked 10.5p to 1,04.5p, lowest for more than five years, as stories swirled that it was near to producing a profits warning. Finance director Andrew Robb denied any such intention. He was prepared to go along with the company's stockbroker, Cazenove, which six weeks ago cut its forecast to pounds 110m, leaving a maintained dividend uncovered.
Mr Robb, who plans meetings with some investment houses, bought 12,007 shares at 108p; chairman Sir Nigel Rudd picked up 100,000 at 107.5p.
The increasing worries about sterling's impact on exporters' earnings killed what had at one time looked like a strong Footsie display.
With Far Eastern markets continuing to recover, Footsie quickly scored a 50.5 points gain and seemed to have the desire to close in on its 5,330.8 peak. But with New York closed enthusiasm evaporated and by the close the gain had been eroded to 10.5 at 5,273.6.
Drugs did their best to give the stock market a shot in the arm. The sector rose more than 5 per cent as stories of a SmithKline Beecham deal dominated activity. The drugs giant, according to rumours rife in the US, is on the verge of a product alliance, perhaps even a merger, with American Home Products. Although the companies refused to comment SB surged 61p to 743p, injecting life into Glaxo Wellcome (52p at 1,639p) and Zeneca (72p to 2,297p). Glaxo also drew strength from a US presentation.
Rumoured corporate activity, with the inevitable story of a mega-bid being lined up, created much of the day's action.
Allied Domecq jumped 21p to 568p as the story of a deal with Seagram was given another whirl and GRE, the insurance group, rose 13.25p to 368p on talk of a Continental strike. Ladbroke, accompanied by Hilton Hotels bid speculation, improved 7.75p to 298.75p, and Woolwich, with almost all the big money groups in the frame, put on 5p to 340p.
Much of the session's real takeover action involved Allied Colloids, the chemical group unloved and unwanted at 101.5p in November. The shares rose 28p to 196.5p as Hercules of the US and Ciba of Switzerland clashed for control. Underlining the neglected value on the market's undercard, Bluebird, the toys group, rose 27.5p to 112.5p as Sir Ron Brierley's Guinness Peat slapped in a pounds 42m offer, 101p a share. The bid was promptly denounced by Bluebird.
Astec (BSR), the electronic equipment group, added 6p to 117p after its independent directors rejected a 111p-a-share offer from the controlling shareholder, Emerson Electric, as "wholly inadequate".
Blue chips with little Far Eastern exposure, such as Railtrack and Whitbread, moved ahead. Utilities also benefitted from the flight to domestic shares.
Another raft of festive trading statements had a mixed reception. Body Shop International ended 10p lower at 127,5p while Thorntons hardened 9p to 279p. Blacks Leisure fell 13p to 472p.
Somerfield, where takeover rumours hover, weakened 8p to 237.5p. Interim figures are due today; around pounds 56m against pounds 54.6m, is expected.
Cairn Energy held at 445p as a hovering line of 2.3 million shares was cleared at 440p. United Energy, with presentations planned, was unchanged at 18.5p.
Arjo Wigins Appleton, the paper and packaging group, fell 10p to 147p; Dresdner Kleinwort Benson reduced its profits forecast from pounds 241m to pounds 220m. Tate & Lyle, the sugar group, rose 8p to 533p; NatWest Securities pushed its profits estimate 5 per cent higher to pounds 263m.
BSkyB had a fuzzy time, off 31.5p to 378,5p, a two-year low. European regulatory concerns and worries about prospects did the damage. BZW cut its profits forecasts from pounds 295m to pounds 290m and from pounds 400m to pounds 320m.
Pottery shares were chipped as worries about the industry's prospects deepened. Churchill China fell 17.5p to 412.5p and Royal Doulton 10p to 198.5p.
Food group John Lusty rose 0,75p to 8.75p (after 9.25p) in brisk turnover.
Aston Villa stumbled 49p to 653.5p after Saturday's 5-0 demolition by Blackburn Rovers. Chelsea Village fell 3p to 100.5p.Reuse content