Dealers and market-makers in London's equity market were driven almost to distraction after an extremely volatile trading session prompted by the latest developments in Brazil. Events in Brazil, which included the currency being allowed to float on foreign exchange markets, brought about a sudden surge by the Brazilian stock market and transformed sentiment in Europe and, later, Wall Street. Investors decided that a free float was a better option than a costly and fruitless defence of the currency. At the close, Footsie was up 120.8 at 5,941.9, having been 83 points down at its worst, during the morning. Domestic as well as international news helped propel the leaders. Dealers reported strong rumours that another burst of corporate activity will hit London next week, involving the defence, insurance, leisure and retail areas.
Outside the leaders, however, it was a different story, with the stock market's mid and smallcap stocks never looking likely to move into plus territory despite embarking on an afternoon rally. The FTSE 250 settled 15.7 lower at 4,857.1, having dropped to a session low of 4,833.8, down 39.0. The FTSE SmallCap closed 7.6 off at 2,100.1, having dropped back below the 2,100 level and hit a day's low of 2,096.6.
Over the week the FTSE 100 has fallen 206.2, or 3.7 per cent, the FTSE All-Share 87.33, or 3.1 per cent, the FTSE 250 119.3, or 2.4 per cent, and the FTSE SmallCap 33.65, or 1.6 per cent.
