FTSE 100 falls, led down by Tesco shares

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(Close): Shares in Tesco dragged the London market lower.

The retailer's shares plunged as much as 17% earlier, to their lowest level in 14 years, before recovering somewhat to 6.6% lower at 174.9p.

That followed a warning from the supermarket that full-year profit would be substantially below market expectations.

Overall, London's FTSE 100 main share index fell 2.14%, or 142.68 points, to 6,529.47.

Other supermarket shares, Morrisons and Sainsbury's, also fell. They dropped 4.4% and 1.8% respectively after fears Tesco could cut prices further.

"While most investors are focusing heavily on the bad news, uncertainty and panic can create exceptional opportunities for long-term value investors like us," said Ian Kelly, a European Equities fund manager at Schroders, Tesco's eighth-biggest shareholder.

On the upside, shares in G4S rose 2.1% after Credit Suisse raised its target price for the stock to 320p from 245p and moved it to an 'outperform' rating from 'neutral'.

On the currency markets, the pound rose 0.28% against the dollar to $1.56950, while against the euro it fell 0.49% to €1.26460.