Tesco profit warning: How fund managers are responding

A number of top fund managers took a hit on their portfolios this week as retail favourite Tesco issued a profits warning, sending its shares down 16% in a day - the largest fall since 1988.

The supermarket giant, which has a market cap of £26bn, suffered its worst Christmas sales for decades, with 2.3% shaved off like-for-like numbers in the six weeks to 7 January. Chief executive Philip Clark was forced to issue the first profits warning in 20 years as he said revenues for the year are likely to be at the lower end of forecasts. Shares plummeted 16% to 323p on Thursday, and remained around the 318p mark on Friday morning, disconcerting managers who backed the stock in the belief food retailers would be a defensive play in the volatile markets. Invesco Perpetual's Nei...