At one time the index was up 60.9 points. Then Mr Greenspan spoke. His warning that the US economy may be on an "unsustainable track" wiped out the gain and sent Footsie spinning 70.5 lower; it ended off 43.5 at 5,262.1. Government stocks lost almost a point.
His earlier attempt to cool down stock markets had a short-term impact. In December he created turmoil with the Dow Jones Average 55.16 and Footsie 88.2. down. Next day the two markets rallied, shrugging off the Federal Reserve chief's comments that markets were a "collapsing financial asset bubble".
They went on to make spectacular progress with Footsie up from 3,963 and the DJIA from 6,381.
In his latest testimony, which had New York in ragged retreat from its peak during London trading, Mr Greenspan said, perhaps not surprisingly, it was "unrealistic" to expect shares to continue to achieve the strong gains seen over the last two years.
Banks were the hardest hit. Gains were obliterated. Barclays, at one time 17.5p up, went to a 75p deficit, ending 45p off at 1,674.5p. HSBC fell 44.5p to 2,098p and Abbey National 19.5p to 927.5p.
Railtrack remained on the right lines with a 33.5p gain to 977.5p as speculation continued about its property assets. Ladbroke's again made progress with hopes of Sheraton management contracts and Hilton stake building spurring the enthusiasm.
Suggestions Asda, the superstores chain had found another deal after the failure of its get together with Safeway to materialise, lifted the shares 5p to 162.5p. P&O remained firm, up 17p at 714.5p, on hopes of regulatory clearance for its Stena cross -Channel link and Reckitt & Colman put on 16.5p to 1,026.5p on continuing takeover speculation.
Blue Circle Industries gained 14.5p to 390.5p with SBC Warburg repeating its 435p target.
Greenalls ended 4p (after 10p) higher at 380.5p. Talk is growing of bid action with Rank, the leisure group, replacing Allied Domecq as the likely predator. Rank is in need of an impetus. It could see Greenall's problem managed pubs chain as the ideal partner for its own pub operation. Greenall's extensive wholesaling side could also attract Rank.
Downgradings had a predictable impact. BT fell 7p to 444.5p on ABN Amro Hoare Govett caution; British Aerospace suffered at the combined hands of Hoare Govett and Merrill Lynch, falling 50.5p to 1,741.5p and Imperial Chemical Industries lost 12.5p to 993.5p on worries, first highlighted by Merrill Lynch, about its third-quarter profits.
Norwich Union survived the downturn, up 5.5p at 348p, on NatWest Securities support.
Properties remained firm, largely reflecting HSBC upgrades; Pillar added a further 13p to 281.5p.
Rolls-Royce, making presentations in Scotland, fell 7p to 231p as a US seller dominated. British Biotechnology was also hit by a strong seller; in heavy turnover the shares fell 10p to 127.5p as an institution unloaded.
Engineer Triplex Lloyd gained 8.5p to 223.5p although it said takeover talks had ended.
JKX Oil & Gas, where Ukrainian interests have nearly 24 per cent, rose a further 4p to 63p and defeated bidder Ramco Energy fell 105p to 895p.
Brent International, the chemical group, gained 5.5p (after 11p) to 99.5p in busy trading and Zetters, the pools group, added 11p to 111.5p as chairman Paul Zetter implied a deal, even a reverse takeover, was being lined up.
Kingsbury, the furniture retailer, jumped 26.5p to 200p on the pounds 47.6m agreed bid from H&C Furnishings. Signet's big share trade turned out to be an illusion; someone, somewhere, punched an incorrect deal into the system. The shares ignored it all - unchanged at 33.75p.
African Lakes, a distributor, rose 7p to 65.5p. The shares have come up from 44.5p. Someone has got the story running that George Soros is buying.Reuse content