Sector movers: Tesco leads supermarkets higher but sentiment still fragile

6th Oct 2014 14:01

Supermarket stocks were attempting to claw their way back on Monday after an accounting error and a string of profit warnings at Tesco crushed sentiment in the sector.Tesco's shares have lost 25% of their value since the company revealed on 22 September that it had overstated its profit guidance for its first half by £250m, mainly due to the "accelerated recognition of commercial income and delayed accrual of costs".The UK's largest grocer, which just last month welcomed new chief Dave Lewis to the board, also suspended four executives and fast-tracked the appointment of new finance chief Alan Stewart as it looks to turn around its fortunes amid falling sales and shrinking market share.The accounting scandal also prompted the Financial Conduct Authority to launch an investigation into the company, it was announced last week.In a bid to rebuild confidence and repair shareholder sentiment, the firm said on Monday that it would be appointing two highly-regarded consumer-based directors to beef up its board, namely the boss of catering group Compass and the former chief of furniture giant IKEA. The changes are a "light beam of good news [...] in a sea of darkness", according to Shore Capital. The broker said: "Non-executive directors rarely put pennies into the tills but in this instance we welcome the joint appointments and hope that it represents the recommencement of more effective governance of Tesco."The announcement helped the stock to rise 2.2% to 175.95p by Monday afternoon. Rivals J Sainsbury and Wm Morrison, having fallen 20% and 13% over the past two weeks, were up 1.2% and 1.7% on Monday, respectively.Meanwhile, Tesco's chairman Richard Broadbent, who has been at the centre of much criticism over recent weeks, would consider stepping down once the investigation into accounting practices is complete, according to sources cited by The Wall Street Journal. Top performing sectors so far todayMining 15,693.58 +2.33%Food & Drug Retailers 2,510.78 +1.92%Chemicals 9,728.24 +1.79%Forestry & Paper 10,825.21 +1.26%Automobiles & Parts 7,404.65 +1.12%Bottom performing sectors so far todayIndustrial Metals & Mining 1,278.65 -0.59%Oil Equipment, Services & Distribution 21,863.52 -0.44%Food Producers & Processors 7,115.76 -0.13%Gas, Water & Multiutilities 5,990.05 -0.02%Health Care Equipment & Services 5,773.32 -0.02%