LONDON MARKETS: Tesco Slumps, Sends FTSE Lower For First Time In Three Days

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Tesco PLC shares slumped on Thursday after a profit update, weighing on the benchmark stock index and dragging down other U.K. supermarkets.

The FTSE 100 index slid 1.2% to 6,322.44, setting it on track to break a two-day winning streak.

Falling to the bottom of the index, shares of Tesco (TSCDY) sank 5.6% after the supermarket chain said an investigation into its accounting practices showed the profit forecast for the first half had been overstated by 263 million pounds ($422 million). In September, the company said the accounting error was GBP250 million. Chairman Richard Broadbent will now step down, Tesco said.

Other supermarkets tracked Tesco lower, with shares of Wm Morrison Supermarkets PLC and J Sainsbury PLC each down around 3%.

Shares of Unilever PLC (UL) dropped 4%. The maker of Magnum ice cream and Dove shampoo, among other things, said sales growth slowed in the third quarter and warned of a tough outlook.

Mining firms were also on the decline in London, as metals prices headed south. Shares of Rio Tinto PLC (RIO) lost 2.4% and BHP Billiton PLC (BHP) fell 2.3%. Anglo American PLC gave up 2%, despite reporting a rise in iron-ore production.

Among few companies in positive territory, shares of GlaxoSmithKline PLC (GSK) rose 0.8% after Barclays lifted the drug maker to overweight from equal weight.

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