Tesco dragged London’s leading shares index down today after its shares fell 16% following a grim Christmas update and profits warning.
The UK’s biggest supermarket admitted that profits growth would be at the low end of expectations this year and its shares fell 61.6p to 323.5p to a near-three year low.
With several other retailers also in the red, the FTSE 100 Index lost earlier gains to fall 8.4 points to 5,662.4.
London’s blue chip shares index failed to make progress despite a strong performance by miners and encouraging bond auctions in Italy and Spain, which eased fears over the eurozone debt crisis.
Even though Sainsbury’s and Morrisons had already posted resilient updates shares in the pair were down by 16.2p at 285.9p and 18.1p at 285.9p respectively.
Home Retail Group saw its shares fall 5% or 4.3p at 83p, making it the biggest faller in the FTSE 250 Index, after it warned it planned to slash its dividend after a poor festive season at its catalogue chain Argos.
Chocolatier Thorntons fell 4.1p to 10p after it reiterated a profits warning following worse-than-expected Christmas sales.
Royal Bank of Scotland was the biggest riser in the top flight after it announced plans to restructure its investment banking operation in a move set to cost around 3,500 jobs.
Investors appeared to back the bank’s plans, as shares climbed 6%, or 1.2p to 23p.
The biggest Footsie risers included Vedanta Resources ahead 48p at £10.64, Ashmore up 14.9p at 340.8p, and IMI ahead 29.5p at 859p.
The biggest Footsie fallers included Polymetal International off 49p at £11.05.
Alan Cockburn, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that Nautical Petroleum added 3.49% to 282p whilst Stagecoach gained 3.84% to close at 281.05p.
Among the fallers Xcite Energy and Melrose Resources fell further, shedding 3.59% to 93.75p and 3.48% to 260.5p respectively. FirstGroup also ended the day in the red, having lost 1.99% to 319.6p.