The day's main talking point was inevitably BAE Systems, which slumped nearly 8% after news that the US Department of Justice had launched a corruption probe. But leaving that aside, there were some brighter spots elsewhere.
Vodafone continued its gains on hopes that the mobile phone giant would be chosen as the European partner for Apple's iPhone. It climbed another 2.4p to 160p, shrugging off a decision by the European court of justice that mobile companies cannot claim back £3.3bn of VAT.
Other telecoms' shares were also brighter, including BT, up 5.5p to 320.75p. Traders said there were a number of minor announcements from the company, but none of these would really push the price higher. There did however seem to be some read-through from Monday's successful placing of €2.65bn worth of shares in France Telecom by the French government.
Still among the risers, credit data agency Experian jumped 11p to 600p as it bought a 65% stake in Brazilian credit bureau Serasa for $1.2bn. Citigroup analysts said "the strategic rationale of this deal is clear and sensible" and repeated its 680p a share target, while Panmure Gordon said any weakness in the share price was an excellent buying opportunity.
Meanwhile Royal Bank of Scotland edged up 1p to 641p after a Dutch court seemed to boost rival Barclays in the battle to take over ABN Amro. The court said ABN could sell its US arm LaSalle without a shareholder vote, which is a key part of the Barclays/ABN deal. RBS was higher on the theory it would not now overpay for ABN, while Barclays fell 9.5p to 710.5p. If it does win ABN, traders said this would ease some of the takeover speculation surrounding Barclays itself.
Oil giant BP was 0.5p better at 589.5p as ABN Amro raised its forecasts for Brent crude in 2007 to $62.90 a barrel from $55.90 a barrel, and to $55 from $45 a barrel for 2008. BP has also given more details of its biofuels project in Hull, in association with DuPont and Associated British Fuels, up 3p to 923p.
Back to BAE. Its shares were by far the biggest faller in the FTSE 100, losing 34.5p to 407.75p on confirmation of the US investigation. Analysts however were more phlegmatic than investors.
"It is unclear at this stage how long the investigation may take, although part of today's share price fall could reflect investor concerns that it could take some time given the apparently complex nature of the alleged process," said Jeremy Batstone-Carr of Charles Stanley. "In our view share price downside is limited by the already substantial 20%-plus discount to the European defence sector rating on which the shares trade.
"The potential upside, although on hold while the US investigation takes place, includes the probability that, if exonerated by the US authorities, further US defence-related acquisitions are likely, the latest stage of the Al Yamamah deal will go through, while UK operating margins should continue to rise.
"But sufficient uncertainty exists, at present, for us to be unable to adopt anything other than a hold recommendation on the shares."
Panmure Gordon said: "This is bad for sentiment and could delay the signing of the Salam deal but it is unlikely to have a material financial impact and could ultimately cauterise the seeping wound of Saudi related allegations."
Other fallers included software and services group Sage, down 4.75p to 234.75p after Credit Suisse downgraded from outperform to neutral and cut its target price from 285p to 266p. "Sage is unlikely to see upside from the current levels until the company offers clarity on the margin turnaround in its North American business," said the bank.
Credit Suisse also did some damage to housebuilder Persimmon, down 20p to £11.70. The bank cut its target from £16.50 to £14.00, following Monday's trading update.
Elsewhere Cadbury Schweppes lost 9.5p to 666p as Citigroup cut its recommendation from buy to hold. "With the disposal of beverages a near certainty, we believe material upside will likely only result if the confectionery business were to fall prey to a bid," said Citigroup. "Our buyout model suggests that a private equity bid is a possibility, but the case is not overly compelling."
So by the close the FTSE 100 index was 29.1 points lower at 6559.3.
Among the mid caps, engineer Charter climbed 26p to £10.31 after an upbeat trading statement, while The Restaurant Group continued to benefit from the sale of its Living Rooms business, up 4.5p to 322.5.
Lower down the market Biofuels, which has built a biodiesel plant in Teesside, slumped 4.55p to 7.2p after its long awaited restructuring. In return for writing off its debt, Barclays will end up owning 94% of the company and its Aim listing will be cancelled. The company warned that if shareholders did not approve the deal, insolvency was unavoidable.
"I am amazed these shares haven't fallen to 1p," said one trader.
Numis analysts were more pointed: "We believe that the assets that shareholders are left with are highly likely to be worthless."
Finally Tanzania Gold added 8.5p to 100.5p as investors warmed to its plans to take a stake in a copper and gold deposit in the Philippines.