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(Close): Shares in Tesco fell 11.6% to 203p after the supermarket giant admitted that it had overstated its half-year profit forecast by £250m.

Tesco has launched a review into the matter and four executives have been suspended.

Tesco was the biggest faller on the FTSE 100, with the index down 64.29 points at 6773.63.

British travel group TUI saw the biggest rise, with shares up 1.9%, Admiral was next with a 1.3% gain.

Mining shares fell on worries over the strength of China's manufacturing sector. Shares in Rio Tinto fell 3.8%.

Nevertheless, some analysts are optimistic that FTSE 100 can gain ground this year, perhaps even approaching 7,000 points, a new record.

"I would be simply amazed if the FTSE failed to test 7,000 points," said InterTrader chief market strategist Steve Ruffley.

On the currency markets, the pound rose 0.29% against the dollar to $1.63360 and climbed 0.3% against the euro to 1.27340 euros.