Sector movers: Supermarket stocks side-swiped as Tesco reports £6.4bn loss

22nd Apr 2015 14:36

The swift realisation that a £6.4bn annual loss was not something to be taken lightly saw Tesco's share price drop into the red by Wednesday afternoon, sending the UK food and drug retail sector to the bottom of the pile.The worst loss in the Tesco's 97-year history was initially warmly welcomed by the market, as some expressed optimism that the results would draw a line under the sand following a tough year for the supermarket.Analysts suggested either a bear-squeeze of previous short trades or a genuine appreciation by investors of chief executive Dave Lewis's kitchen-sinking transparency and plan to clean up the balance sheet and turn things around.After rising as much as 2.4% early on, however, the stock had quickly plunged into negative territory and was trading down 4.5% at 224.1p by 15:10.The results took out grocery rivals Sainsbury's and Morrisons too, who were both nursing losses of 3.5% in afternoon trade. Online food retailer Ocado fell 1.6%."The initial flurry of hopeful, Dave Lewis-liking Tesco investors have gradually disappeared as the morning continued, with the supermarket giant finally beginning to tip into the red in the manner its UK pre-tax record breaking losses would suggest it deserves," said Spreadex analyst Connor Campbell.The grocer unveiled sales down 3% to £69.7bn in the year to 28 February, with the previous year's profit swinging to the huge loss before tax of £6.4bn, much worse than the £4.5bn-£5bn expected."To say that Tesco had a nightmare year in FY2015 would be an understatement, an out-turn that would simply have been unfathomable in days gone by," Shore Capital's Clive Black and Darren Shirley said.Top performing sectors so far todayAerospace and Defence 5,238.06 +0.86%Fixed Line Telecommunications 5,214.45 +0.50%Mining 13,994.57 +0.04%Mobile Telecommunications 5,178.77 +0.03%Bottom performing sectors so far todayFood & Drug Retailers 3,135.69 -4.27%Industrial Metals & Mining 1,834.82 -2.05%Forestry & Paper 14,509.02 -1.97%Oil Equipment, Services & Distribution 18,670.19 -1.83%Industrial Engineering 9,135.63 -1.49%