Worldwide stocks took a heavy battering last week when the Brazilian Central Bank was forced to devalue its currency and the governor of the central bank resigned, causing shareholders to rethink their investments.
The Brazilian crisis caused the FTSE 100 to fall by a massive 183.5 points on 13 January - its biggest single-day decline in both point and percentage terms since 1 December 1998. As a result of the drop, all the gains that stocks had experienced since the beginning of the year were wiped out.
Stocks from around the world were also drastically affected by the crisis in South America. On Wall Street, trading was extremely volatile, with technology shares in Nasdaq dropping by five per cent on the first day of the crisis but recovering the following day to regain the losses.
The Dow Jones fell more than 260 points and recovered later on.
Analysts warned that the Group of Seven (G7) leading industrial companies feared the devaluation could prompt investors to withdraw funds from other emerging markets and risky investments.
As of 15 January, IT stocks in the UK seemed to have recovered from the initial downturn in the week. Movers included Compel, which rose 1p to 394p; Computacenter, up 4p; and Action Computer, up 1p to 231.5p. Northamber's share price rose from its 1999 year low to 152p. But Datrontech dropped 1p to 25.5p.
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