A speech scheduled for today by Alan Greenspan also unsettled trading. The US banking chief's comments last month about shares being overheated produced a sharp, if short-lived, setback. Fears he will repeat his cool- it-down message haunt traders. There are also worries transatlantic interest rates will be driven higher next week and New York's late Tuesday fall also took its toll.
With Eddie George, Governor of the Bank of England again talking of higher domestic rates any suggestion of stock market exuberance was crushed before a single trade was recorded.
Footsie was in negative territory throughout the session, ending 29.9 points off at 4,207.5 with a strong New York opening completely ignored.
LucasVarity lost much of Tuesday's gain, reversing 11p to 209p as the market wondered how share buybacks and dividend payments would be reconciled with the conflicting needs of UK and US shareholders.
Premier plunged 59.5p to 632.5p after warning profits for the year ending on Sunday would be below market forecasts. Last year, despite fierce opposition from some of its institutional shareholders, the electronics group dramatically increased its size with a pounds 1.8bn US takeover.
Abbey National was the best-performing blue chip. Ahead of next month's yearly figures the shares gained 16p to 759.5p with Cazenove, Merrill Lynch and Panmure Gordon among investment houses making positive noises. Profits should nudge pounds 1.2bn against just over pounds 1bn and there is talk of share buy backs or special dividends.
The market has become increasingly enraptured by banking shares which have been in the forefront of the recent bull run.
BAA, the airports group, managed a 2p rise to 523.5p with Lehman Brothers sending out buy signals. It expects nine-month profits, due on Monday, to come out at pounds 395m (pounds 374m) and talks about accelerating traffic growth.
Stagecoach, the bus and train group, continued to suffer, retreating 36.5p to 741.5p. The shares were nudging 800p on Monday before it became known the Government had put a clamp on its Scottish rail ambitions and the former owners of the Porterbrook leasing acquisition planned to cash in by selling 14.6 per cent of the company.
Amec, the building group, had a busy session with talk a bidder could appear. Kvaerner, the Norwegian group which took over Trafalgar House, still has a 25.89 per cent stake, a legacy of its abortive strike. The shares rose 7.5p to 105.5p.
Tate & Lyle, the sugar group had another sour session as more analysts lowered their profit expectations following a fall in fructose corn syrup prices. The shares were lowered 2.5p to 426p, a 12-month low.
First Leisure Corporation put on 18.5p to 359.5p as Michael Grade arrived as the guiding force and Grosvenor Inns continued to recover ahead of results, gaining 16.5p to 200p.
The search for the fund management group in predatory sights switched from M&G, off 17.5p to 1,315p, to Henderson Administration, up 17.5p to 1,387.5p. Dresdner, the German bank, and ABN Amro, the Dutch group, are said to be on the prowl.
Monument Oil & Gas drew more strength from its venture with US giant Mobil in little-known Turkemenistan. Vague takeover talk also drifted around. The shares rose 2.5p to 86.75p in brisk trading. British Borneo Petroleum Syndicate, ahead of a rumoured meeting with analysts, crossed the 1,200p mark, closing at 1,201p, up 8p. Dragon Oil was the day's most actively traded share with Seaq recording a 30.7 million turnover. The price firmed to 1.75p.
Among the day's best performers were International Greetings, selling such items as Christmas crackers and wrapping paper, and Prime People, a recruitment business. Shares of International Greetings jumped 120p to 812.5p following a 48 per cent interim profit gain to pounds 1.5m and Prime People gained 1.5p to 6p, reflecting improving figures.
Tracker Network and Electronic Retail Systems made headway. Tracker, a car security group, advanced 55p to 480p and ERS recorded a 50p gain to 405p.
Blick, an electronic security group, fell 54p to 297p following a cautious trading statement.
rBolton International, building up interests in China, fell 3p to 8p following the surprise departure of director Mark Keegan. At the last count he was a significant shareholder. Originally a textile group, Bolton was turned into a property operation before coming under the control of Oei Hong Leong, a Hong Kong tycoon. The shares were 22p in March last year.
rAND International, an electronic publisher, jumped 87.5p to 362.5p. The shares, a narrow market, were placed at 70p last summer. The Oxford- based company has significant interests in Holland and Amsterdam dealings in its shares started last month.
rStockbroker Redmayne Bentley regards Fine Art Developments (245.5p) as a recovery share with "an element of speculation".